I have a debit card. I always kind of wondered why I was asked. I take my debit card out when I want to use debit and I take my credit card out when I want to use credit. (Yes, I know that a debit card can be used as either, but in my own head I am clear about my intent!)
Then I kind of figured out that it makes a difference to the vendor. Credit card fees apply to the seller, they don't just make money off the interest charged to the buyer who doesn't pay off the full amount each month. On the other hand, the credit union loses with debit use and makes the fee from sellers so they always encouraged members to use the card as a credit card.
So generally I try to use my debit card for small, local vendors. I always use my credit card for gas and restaurants and online purchases. I didn't have much of a reason other than that is how I do it, but then I came upon this article about 8 dangerous places to use a debit card.
Who knew? But I will congratulate myself for having good instincts anyway.
Then I kind of figured out that it makes a difference to the vendor. Credit card fees apply to the seller, they don't just make money off the interest charged to the buyer who doesn't pay off the full amount each month. On the other hand, the credit union loses with debit use and makes the fee from sellers so they always encouraged members to use the card as a credit card.
Who knew? But I will congratulate myself for having good instincts anyway.
It seems that everyone has an angle and a way to make money. I just wish the world was more straightforwrd and honest.
ReplyDeleteWhat a good post!
ReplyDeleteWe use our credit card for almost all purchases. I use my debit card only at Costco, where I can't yet use Visa or Mastercard, or at the grocery store or an ATM when I want cash. We have a World Points cart and an Amazon card. Today i made a purchase of children's books onAmazon and paid $0.00 because of credit card points.
ReplyDeleteThe complex where we live got new software and I had to set up 'auto pay' for our rent. The complex gets nothing from these charges but if I use my bank card it was about $4 a month, through my bank account it was about $2. Finances are confusing.
ReplyDeleteWow. I didn't know apartments had gotten that savvy. I mail my rent payment to my landlord's bank. Their bank gives stamped, self-addressed envelopes so it's perfect.
DeleteWe use our debit card only when we travel. I avoided my debit card for a long time because when I first started using it I overdrew on my account. The bank forgave me the amount because they realized I didn't know the money was coming out of my checking account. I am sadly not very knowledgeable about finances.
ReplyDeleteI was part of the banking industry when ATM and debit cards were introduced. Though it was part of my job to convince customers to use these cards, I do not own a debit card. It is much easier to pay everything with a credit card and if you have a dispute it is much quicker and easier resolved than if you have to deal with a bank on misuse of your debit card.
ReplyDeleteI have credit cards which I use exclusively for purchases.
ReplyDeleteI also have a bank debit card which I use for ATM withdrawals.
I use my cards just like you do. That means we are both smart huh?
ReplyDeleteI use my cc for most every purchase. I only use my debit card at the bank -- inside. I don't even trust the ATM machines outside the bank! Jenna had her card compromised once. It was from the local gas station! Better to be safe then broke!
ReplyDeleteI only use my debit card for cash withdrawals. I always use the credit card for purchases and pay it off every month. If I can't afford to do that, I don't buy. Bob recently was shorted $20 at the ATM. In all our 71 years that has never happened. The bank audited the machine and put the $20 back in our account. Always a good practice to count your money!
ReplyDeleteI guess I am a rare one. I use my debit card for most purchases such as groceries, clothing, hair cuts, manicures, and eating out. I always have cash on me, but I rarely use it. I use the my credit card for larger purchases or if I buy online. I buy some things from Amazon because I get points. I am a former bookkeeper, so I run an account balance in my head without actually makes notations as one would in a checkbook. I also take into account the encumbrance I might have against my checking account from scheduling payments online. If I believe there might be a problem with a purchase, I use my debit card as a credit card, or I use my credit card. I do all cash withdrawals at the bank using my debit card.
ReplyDeleteI don't have a debit card, just a credit card ... simply b/c I'd rather pay next month instead of today. (And also, as Granny Annie says, if you have a dispute the credit card company will likely help you out.)
ReplyDelete