Debit vs. Credit Cards

[nbking]

We use the Citibank Costco credit card for everything. Never use my debit card, except to get cash out of the ATMs.

 

[jyoutz]

In my opinion - Debit cards are used to access cash and cash only. There is zero benefit to purchasing anything with a debit card - it exposes the buyer to too much risk.

Theoretically probably. In practice I have been using debit cards for 30 years without any catastrophic problems.

 

[MossRoad]

AMEX !

You should know AMEX is the only major credit card company that requires merchants to sign a waver allowing AMEX to use the customers purchase history information for profit.
I wouldn't let my dog carry this card. And we banned it's use in protest at our business.

I gave up on American Express over 30 years ago. They kept sending my advertisements to join, then kept rejecting me.

At that point, it just felt like they wanted me to feel bad, so I quit applying. We get along fine without them. So as Bill the Cat would say....

 

[jyoutz]

We're seeing a lot of small businesses that do offer cash discount, AND some that ONLY accept cash. Especially restaurants.

I’m seeing the opposite. Many businesses discourage cash. Especially large businesses such as Walmart only have one or two check outs that take cash. And I have seen no small businesses that give cash discounts.

 

[MossRoad]

I’m seeing the opposite. Many businesses discourage cash. Especially large businesses such as Walmart only have one or two check outs that take cash. And I have seen no small businesses that give cash discounts.

I think it's mostly small businesses.

 

[Cougsfan]

From what I have seen, people with extremely poor financial habits use their credit cards and don't pay the balance at the end of the month. Equally bad are people who use a debit card with no money in the bank to back it up. People who have a little better, but still less than ideal, financial habits regularly use their debit cards within the limits of their finances (mostly young people seem to do this). The smartest way is to use a credit card with a high payback rate and religiously pay of the balance each month.

All this is easy to say for most of us whose income is greater than our minimal expenses for necessities, which unfortunately not always true for everyone.

 

[beowulf]

We use the most advantageous credit card we could find (regarding discounts, cash back etc. ). It was my understanding that debit cards were riskier than credit cards because your money was gone - and with credit cards you were not liable except perhaps for $50 if you delayed reporting an issue. I could be wrong about this, maybe things have changed.

I use a debit card only at ATMS at our bank or other no-fee ATMS. I did once consider using a debit card at certain gas stations - those that only took debit cards. The gas was cheaper per gallon but they charged a bit for using it. Anyway, I did the math, figured the cost using a debit card to get a less-per-gallon cost, added in the debit card fee, and compared all that with using my credit card which added to the cost per gallon, but gave me a percentage off of the cost. It was a wash. And credit card interest rates don't matter as we pay everything off each month - some don't and I guess that is how they subsidize the rewards we get on our cards.
We also get a number of other benefits with our credit card - extended warranties, replacement of things are lost, broken or stolen within a certain time frame. . . etc.

 

[NoTrespassing]

From what I have seen, people with extremely poor financial habits use their credit cards and don't pay the balance at the end of the month. Equally bad are people who use a debit card with no money in the bank to back it up. People who have a little better, but still less than ideal, financial habits regularly use their debit cards within the limits of their finances (mostly young people seem to do this). The smartest way is to use a credit card with a high payback rate and religiously pay of the balance each month.

All this is easy to say for most of us whose income is greater than our minimal expenses for necessities, which unfortunately not always true for everyone.

A lot of people consider things to be necessities that aren't truly necessary. I lived on minimum wage for a time. I lived in a crappy apartment in a dangerous part of town with two roommates in a one-bedroom apartment. I lived in the basement of an old house with an extension cord to the neighbors for electricity, no phone, no cable tv, no car, only a bicycle and bus for transportation and never took a government handout. Even now we live well below our means. Our household income is about 4 times our expenses.

 

[Cougsfan]

A lot of people consider things to be necessities that aren't truly necessary.

Ain't that the truth! It would be great if more people had the discipline to live within their means.

 

[Jstpssng]

I see businesses with minimum purchase amounts, usually ten dollars. Cash discounts on gas are up to a dime per gallon now. I get 2% rewards which offsets some of that.
The last restaurant I went to adds a 3% surcharge for using plastic. Had I known before I got to the register I would have left a bigger tip on the table, rather than putting some on the card. (Some for the government, some for the waiter...)

As I've stated in another discussion, if I have checks out and somebody scams my debit card it could get expensive... all of my payments go through my checking account. Sure I'll get it back but if my insurance cancels because I didn't know the money was gone...

I use 3 cards; one for my truck, one for my various garden and livestock costs, and one for general purposes. I also keep a $100 bill with me at all times.

 

[TheMan419]

It's mind boggling to me how few businesses will offer a cash discount anymore.

There are plenty of studies out there showing it is actually more expensive for the business to take cash. You have to have controls in place to prevent sticky fingers, balance the drawer at the end of the shift, get the money to the bank to deposit, run the risk of robbery etc. The vast majority of those concerns go away if you are taking plastic.

 

[TheMan419]

Kinda but probably not. They have the cost of the transaction fee built into the price of the item/service. If someone pays cash, they just make more profit for themselves. No smart business is going to take a loss on credit card purchases. They're going to pass it along to the consumer by building it into the price up front.

Or just saying we are adding a 3% transaction fee to cover the cost of the processing fee with their payment processor.

 

[MossRoad]

Or just saying we are adding a 3% transaction fee to cover the cost of the processing fee with their payment processor.

Yep. There's some restaurants up north of town that do that.

 

[MossRoad]

There are plenty of studies out there showing it is actually more expensive for the business to take cash. You have to have controls in place to prevent sticky fingers, balance the drawer at the end of the shift, get the money to the bank to deposit, run the risk of robbery etc. The vast majority of those concerns go away if you are taking plastic.

Back in high school I had to balance cash for the DQ I was working at. Had to run the "X tape" as I recall, and it would print out all transactions for the day, cash drawer starting and ending balance. If drawer didn't balance to the penny, YIKES! the owner would get upset. No credit cards at that location back then.

 

[BigBlue1]

I use debit cards exclusively. No high interest credit cards for me. The debit card accesses cash I hold without having to carry cash. I earn 2% on each purchase. Yes earn 2%, have for years. And the seller pays the trnasaction fee not the buyer, hope this helps

There's a lot to unpack there. First, if you're paying off the credit card monthly, which is what you'd do if you have the money in the bank to use the debit card, there are no high interest rates. And for the transaction fees, the Visa or Mastercard network is adding those fees to all transactions, debit or credit. And consumers ultimately pay the fees through the cost of the product they purchase. So there is a net-zero difference between debit an credit there too.

As for the 2% earning, that is something I've never heard of on a bank debit card. Which bank do you have that pays a reward on debit card purchases. That's interesting.

 

[bnold]

AMEX !

You should know AMEX is the only major credit card company that requires merchants to sign a waver allowing AMEX to use the customers purchase history information for profit.
I wouldn't let my dog carry this card. And we banned it's use in protest at our business.

You better stick with cash if you are looking to be ‘untraceable’.

Amex benefits far outweigh Visa, MC, Discover for my use.

I have Visa through USAA and Wells Fargo.
Visa and MC don’t service their own cards, they are issued through a 3rd party.

Amex is the financial base and the servicing party and as such have some of the best customer interaction reviews around.

We also didn’t accept for a while in our business, mainly because it was more expensive. We do now however.

Amex base and volume has always been much lower than the other 3, different business model for sure.

 

[murphy1244]

Snobds has it right
Debit cards you have to have the money in your account to use it. If you lose it, you might lose your money too.
I use a credit card and get points and pay the balance when the bill comes. I have never had or used a atm card.
I seen what happens with that.

 

[jyoutz]

My paycheck gets direct deposited to my checking account, and I withdraw a small amount for pocket cash, then use the debit card for everything else. It makes things simple.

 

[Bronco82]

I have been using my Visa strictly for the greater rewards. It gets paid off when the statement comes in, and have not paid anything in interest since I first received one. If I were to use my debit card for the purchases, I would not receive any rewards. These rewards have provided my wife and I many things over the past few years which we normally would not splurge on ourselves.

 

[MossRoad]

Snobds has it right
Debit cards you have to have the money in your account to use it. If you lose it, you might lose your money too.
I use a credit card and get points and pay the balance when the bill comes. I have never had or used a atm card.
I seen what happens with that.

Our debit card has protection against unauthorized purchases.