03-04-2009 06:16 AM
I didn't think about a debit card. I assume that works just as well as a credit card for most things. The big problem that I see with a debit card is when someone fraudulently takes out money. A defrauded credit card will still allow you to continue to use it during the investigation. A defrauded debit card is out the money until they put it back. One of my employees was recently out several thousand dollars for a month or two when a gas station employee was grabbing customer numbers and selling the info to another to make bogus debit cards. When the same thing happened to me, Discover simply took care of the problem.
When I was talking about emergencies, I didn't necessarily mean that you were spending more money than you could easily pay. If your car breaks in the middle of "nowhere" and it needs a $1000 tow bill and $3000 repair, you would need to have $4000 in your checking account to get going. We all need some money in a savings account.
I think the important thing here is that our spending isn't changed by having a credit card or credit available. I wouldn't spend money on a big screen TV or a car just because I had the credit available. That is the big mistake, buying a more expensive car because "it is only another $100 per month" or some such nonsense. When someone says "I'll just put it on my card" and doesn't think about the value of what they are buying or what it takes to pay for that in the end, they are headed for disaster.
My main point is that you are probably better off with some credit card use, just don't let them make much/any money off you and don't get in debt without careful consideration of the big picture. The credit card companies are just waiting to take advantage of the naive person. So are casinos, state lotteries, car dealers, and just about everyone else.
03-04-2009 07:29 AM
Respectfully, I would like to clarify a few things from one of the posts above:
1. You can Absolutely rent a car without having a Credit card. I've done it a dozens of times with no problem. True there are some rental companies that insist on the credit card, but for most, a debit card works just fine. Some of the ones that allow debit card usage will hold a certain portion of your bill immediately, but I always expect the expense anyway, so its no big deal. BTW, you don't want to do business with the CC only rental companies anyway...I've always found them to be more expensive.
2. You don't need a credit card to go on vacations or cruises. Done several of those throughout my life, and got through each one without a credit card. It was never a problem.
3. You don't need a credit card for Emergencys. What you need is a good emergency savings account and good insurance. That way, if a real emergency pops up, you have the money to weather the storm. Using a credit card for emergencys causes two problems. Not only the original emergency the money was needed for, but also a new financial emergency because you now have to figure out out how to pay your credit card bill.
These are all just myths the CC companies want us to believe, because the more people that believe them, the more money they make.
I agree with you that credit cards are not required to do the things you mentioned above they do make many of those things much easier. There is also a bit less risk with using a credit card versus a debit card. Credit cards offer very good protection against loss/fraud. Debit cards not as much. Which might not be a big deal--until you are a victim of identity theft.
03-04-2009 08:20 AM
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO