Credit vs. Debit: The Debate

[cindybubbles]

I posted a reply to this thread that might spark a discussion that would devolve into Fratching material, so if it does, here's the thread to continue the conversation.

I use credit cards. I don't use debit unless credit is not accepted (like Dollarama and T&T, I think).

The reason is this: If my credit card is overcharged, I can just call my credit card company to dispute the charges before paying. If my debit card is overcharged, though, I'm screwed. Once the bank takes my money away, it is difficult to get it back.

What do you think?

[s_stabeler]

not at my bank. My bank a) keeps a pretty sharp eye out for potential fraud- I have to somewhat regularly call them to get my card unblocked- b) will refund 100% in case of fraud.

[Password]

Surely with debit cards after the customer gets to confirm the payment with either their PIN or signature, so would have had chance to stop it then?

I'll generally use a debit card and I can't recall not being offered confirmation of some form after seeing the amount entered.

[Herebecause]

I also use only my credit card, for a few reasons. My main reason is that with all the issues out there with credit card and debit card information being stolen either online or at the cash register, when my cc has an unauthorized use I'm just out the time and hassle of calling the company and getting a new card; if it is my debit card, which can be used like a credit card, then I'm risking being out the money in my account (even if I can recoup it, it won't be instantaneous and the electric company still has to be paid). I have a debit card but it is only used if I have to get cash from the ATM, and since the closest ATM to me for my credit union is almost always broken, I probably only use it twice a year at most (and my DH uses his even less).

I've also had wrong amounts processed on my card. One time I used my credit card for a purchase and the cashier kept telling me she was having problems running my card; turns out she ran it 3 times (for different amounts) before she finally "got it to work". I'm not sure what scam she was trying to run, but it was caught pretty quickly by my cc company and the incorrect charges were all under dispute within 2 hours of the event and by the time I had to pay that bill, they were completely gone.

The disadvantage of a cc though is it is very easy to spend more than you actually have in your account. My DH and I are careful about this, so while we have one card with a very high limit in case of emergencies that we use only in one store that we frequent a few times a month just to keep it active, our other 2 cards have very low limits, which is a back-up for us to help make sure we don't over use it.

[cindybubbles]

If someone swipes my credit card or info, I can dispute the charges and decide not to pay.

But if someone swipes my debit card, and somehow figures out my PIN, there's not much I can do except report it stolen to my bank.

My debit card doesn't have Interac Flash. I hear it's good, but I'll stick to credit cards for paying for my stuff.

[NecCat]

I'm exactly the opposite, I usually only use my credit cards for utilities. I have had to dispute charges on a credit card before, and it took 7 months to get the charges and interest cleared off my bill. The reason for the dispute - someone typed the wrong number, the receipt was for a different credit card number. It didn't seem to me that should have been seven months worth of hard to figure out.

With my debit card, on the other hand, not only is it easier and faster to cancel and replace if it does get compromised, except for the tap feature (up to $25) I HAVE to enter my PIN for it to be charged, so the chances of someone getting both the card and PIN are greatly reduced, and my bank has a feature I use where I get an email everytime my bank account changes. A purchase is made - email, an amount is transferred - email, a bill is paid - email. That means that if someone did go on a spending spree I would know in about 10 minutes, the emails are usually there 5-10 minutes after I make a purchase. Also my bank account contract says if I dispute any charges within 24 hours, the disputed amount(s) will be put back into my bank account while the investigation goes on. If it takes me more than 24 hours to report disputes the disputed amounts will basically be on hold until the investigation is complete. The only time I had to call and dispute a charge was when I was double charged at a gas station, and the money was back in my account that afternoon.

For me, my debit card is safer and more convenient.

[Ginger Tea]

Never had, probably never will have a credit card.

It's always paying for stuff with "money you don't have"*1. I know they offer better protection for online stores, but I decided that I would set up a second bank account and only ever have what I expected to pay in there that way should anyone try and use my card they would find nothing in it.*2

My card is rarely touched by a cashier as most UK stores the chip and pin pad is either on the counter or built into the self serv, so they wouldn't even know what bank it is issued from.

I might not notice a double scan at the supermarket, accidental or not until I get home, I had one where I found I was charged £1 more as I had 2 bags of salt and vinegar party mix but the receipt said 3, OK its just a quid, but cash debit or credit, by the time I found out I had been over charged I wouldn't know if I genuinely picked up 3 bags and lost one along the way (cycle baskets) or if the cashier passed one down to me and it bleeped again.

But, when asked to enter the card, it says the amount that is going to be deducted from your account so they cant show you a low figure and charge you a higher one, so if I know the number is out of whack I can see it there and then, eg buying DVD's in the multi buy sale and one rings up full price so it ends comes up as a number that is not incremented by £10 and ends in .99 or something like that (eg 2 for £10 or £6.99 each).

*1 Captain Dickhead had 2 or 3 cards at one point and was doing the old rob Peter to pay Paul and had £15k of debt.

*2 I did go to make an account with another bank than my current one, but I needed to bring tonnes of ID that I didn't have at the time, eg birth certificate passport etc, or someone who knew me and also banked with them (preferably that branch). But I might also find that which ever account type that allows online card use needs a minimum deposit per month and that would defeat the whole keeping it empty.

[siead_lietrathua]

i pretty much just use my CC online. i like the extra buyer protection when using secondhand markets, or in certain hobbies that have a long production time.
we use them for emergency car repairs too. just because sometimes you don't have 500$ to drop into an engine sitting around when a gasket blows. (sigh)

[HYHYBT]

In practical terms, the difference isn't in whether you can dispute charges or how successful you'll be, but only whether it's your money or only your available credit you don't have in the meantime.

[EricKei]

I cut up my last CC in 2002...and it took me six years to pay off that whopping huge $3,500 balance. Now I just have student loans to deal with, which were always 95% of my credit anyway, and thus, the primary factor in my Rating being in the shitter. Once I am able, tho, I plan to get a 100% secured CC for the express purpose of improving my credit rating -- e.g. something small like a $300 card, where I'll make, say, a $25 purchase every month, and pay it down to a $5 balance as soon as the purchase shows up in my account.

[Lace Neil Singer]

Never had, probably never will have a credit card.

It's always paying for stuff with "money you don't have"*1. I know they offer better protection for online stores, but I decided that I would set up a second bank account and only ever have what I expected to pay in there that way should anyone try and use my card they would find nothing in it.*2

My card is rarely touched by a cashier as most UK stores the chip and pin pad is either on the counter or built into the self serv, so they wouldn't even know what bank it is issued from.

This, pretty much. As for online shopping, I use Paypal for that, which offers a layer of protection. Fact is, I don't trust myself with a credit card and all that nonexistant but still spendable money, so debit it is.

[cindybubbles]

Fact is, I don't trust myself with a credit card and all that nonexistant but still spendable money, so debit it is.

That's a smart move. But I use my CC because:

1. I know my limits and if I don't, my mother will ream me out.

2. An immense fear of hackers and thieves. I only use debit where credit is not accepted. If they steal my credit card info, they're stealing money that I don't have (so I can dispute the charges). But if they steal my debit card info, they're stealing money that I DO have. To me, if they somehow figure out my PIN, it's only a matter of time before my savings is emptied, whereas with credit, I can just cancel my account and get a new card, I hope.

and,

3. Rewards points, of course! My credit card company offers points that I can redeem for rewards. I just used my points to get two $25 McDonald's gift cards.

[bainsidhe]

Rewards points, of course!

LOL, that's why I'm using the charge card I am right now. If Chase stopped offering rewards, I'd find another rewards card to use. Of course, that really only benefits you if you pay it off each month. Keeping a balance and paying interest will quickly kill any rewards benefit you might receive.

A lot of people here are mentioning pin codes with debit, however in the US, you can run a debit card as credit and without a pin code. Because it's still tied to your checking account, the money comes right out. Should anyone steal my card, they can have a bonanza if I didn't notice immediately. I prefer credit for that reason. At least it's just my credit limit tied up while I hash things out, not my actual money that has to pay bills.

[cindybubbles]

A lot of people here are mentioning pin codes with debit, however in the US, you can run a debit card as credit and without a pin code. Because it's still tied to your checking account, the money comes right out. Should anyone steal my card, they can have a bonanza if I didn't notice immediately. I prefer credit for that reason. At least it's just my credit limit tied up while I hash things out, not my actual money that has to pay bills.

See? That's why I use credit; so that if thieves steal the card, they're stealing money that we DON'T have, rather than stealing money that we DO have.

I also use a PIN code with my credit card whenever I can't just tap my card on the machine.