@OptimalCS wrote:Omar to answer your question: I find it convinent to us my debit card ALL the time! I have credit cards but dont us them! I love mainatining a nice clean credit file but I don't like borrowing from banks. I have cards just for the credit score
I have a great budget and dont need to use credit. I always have cash in my account.
You have a Discover It card and what I assume is a BCE. The Discover It is 5% rotating categories, and BCE is 3% groceries 2% gas.
Depending on your spending patterns, you could be giving up $100 or more in free money every year just because you refuse to use credit. If you're worried about "borrowing from banks", treat your credit card like a debit card and pay the charges as soon as they post. Maintaining a clean credit file is great, but if your cards never show any usage, you get hit with a scoring penalty, and sooner or later the banks are going to close your cards.
I'll give you another reason why credit cards are better -- more benefits (extended warranties, price protection, purchase protection etc) and better protection against fraud. Think about it, when your credit card gets compromised, it's the bank's money on the line, and they naturally have every incentive to try and recover their money. If your debit card gets hacked (like I recently experienced), well you better report it to the bank ASAP or else. It's YOUR money on the line, and if you don't catch it in time, well too bad so sad. Not to mention the NSF/overdraft fees you'll get hit with when your accounts get cleaned out. Having to claw back your money AND get the bank to waive all those fees? Yikes no thanks. After my Chase debit card got hacked, I cancelled all but one debit card, and that one debit card has a spending limit of $1. OTOH the worst someone could do to your credit card is max it out, but you don't have to worry about additional complications.
Budget and credit are unrelated. My friend who makes less than half of what I do has roughly the same budget as me. Like you she also stubbornly refuses to use credit (but has 3 cards to build history) and is debit or cash only. I on the other hand am 99% credit use cash for the handful of times when cards aren't accepted. She earns 0 from using debit and cash, while I'm earning anywhere from $10-25 a month. I PIF 100% of the time and have never paid a single penny in interest since I got my first credit card at 21.
Some people have 30+ cards and fly for free business class off their points while never owing one cent; others don't have a single credit card to their name and yet carry 5-figure debts. Again it's all about your financial habits and not the payment method.
@OptimalCS wrote:Omar to answer your question: I find it convinent to us my debit card ALL the time! I have credit cards but dont us them! I love mainatining a nice clean credit file but I don't like borrowing from banks. I have cards just for the credit score
I use credit cards for 5% or 6% cashback, pay them off in full every month, and collect about $1500-$2000 per year. (Chump change because I am not a traveler). I also eliminate any swipe-related security risks tied directly to my money.
I also always have cash in my account.
To each their own.
+1
I couldn't have said it better myself.
@arkane wrote:
@OptimalCS wrote:Omar to answer your question: I find it convinent to us my debit card ALL the time! I have credit cards but dont us them! I love mainatining a nice clean credit file but I don't like borrowing from banks. I have cards just for the credit score
You have a Discover It card and what I assume is a BCE. The Discover It is 5% rotating categories, and BCE is 3% groceries 2% gas.
Depending on your spending patterns, you could be giving up $100 or more in free money every year just because you refuse to use credit. If you're worried about "borrowing from banks", treat your credit card like a debit card and pay the charges as soon as they post. Maintaining a clean credit file is great, but if your cards never show any usage, you get hit with a scoring penalty, and sooner or later the banks are going to close your cards.
I'll give you another reason why credit cards are better -- more benefits (extended warranties, price protection, purchase protection etc) and better protection against fraud. Think about it, when your credit card gets compromised, it's the bank's money on the line, and they naturally have every incentive to try and recover their money. If your debit card gets hacked (like I recently experienced), well you better report it to the bank ASAP or else. It's YOUR money on the line, and if you don't catch it in time, well too bad so sad. After my Chase debit card got hacked, I cancelled all but one debit card, and that one debit card has a spending limit of $1.
Budget and credit are unrelated. My friend who makes less than half of what I do has roughly the same budget as me. Like you she also stubbornly refuses to use credit (but has 3 cards to build history) and is debit or cash only. I on the other hand am 99% credit use cash for the handful of times when cards aren't accepted. She earns 0 from using debit and cash, while I'm earning anywhere from $10-25 a month. I PIF 100% of the time and have never paid a single penny in interest since I got my first credit card at 21.
Some people have 30+ cards and fly for free business class off their points while never owing one cent; others don't have a single credit card to their name and yet carry 5-figure debts. Again it's all about your financial habits and not the payment method.
@OmarR wrote:
@OptimalCS wrote:Omar to answer your question: I find it convinent to us my debit card ALL the time! I have credit cards but dont us them! I love mainatining a nice clean credit file but I don't like borrowing from banks. I have cards just for the credit score
I use credit cards for 5% or 6% cashback, pay them off in full every month, and collect about $1500-$2000 per year. (Chump change because I am not a traveler). I also eliminate any swipe-related security risks tied directly to my money.
I also always have cash in my account.
To each their own.
+1
Exactly what swiping debit cards do. You might as well be handing someone the PIN to your bank accounts LOL.
If I had to pick between a debit and credit card getting hacked, I'd pick credit every time, for reasons already stated above.
Like a lot of you I us CC for my spending getting the rewards and PIF with the exception of some 0% offers that I can pay off at any time.
However my daughter uses a combinaiton of CC and debit. She is 18 and has just started college. She is an AU on my quicksilver and is learning how to use credit. She does use it and pays it off before statement cut usually. However since her income is limited she dosen't want to have more on the CC than she can pay, so she will also use debit if she has more on the CC than she is comfortable with. As she learns to balance the cc vs. the debit I am willing to bet that more spending gets shifted to cc.
She completely understands that there is no option to not PIF and if she fails to do so she will no longer be an AU on my card.
