seeking advice how to spend money

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peterwantstosave
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seeking advice how to spend money

Post by peterwantstosave »

Hi, there,

I have a macro level question: how should I be spending money?

I have a mix of two credit cards and two debit cards. My spending is sort of all over the place, sometimes on one card, sometimes on another, no real rhyme or reason to it honestly. I don't think I ever learned how to spend in a systematic way.

I'd welcome others' experiences, and thanks.

P
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sailaway
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Re: seeking advice how to spend money

Post by sailaway »

I spend on whatever card will get me the highest rewards for that purchase. I have several cards to achieve this goal.
runner3081
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Re: seeking advice how to spend money

Post by runner3081 »

Never, ever use a debit card.

My system, we have 5 credit cards.

Fidelity 2% CB - Use for everything except when situations below apply.

Discover - Only use for 5% categories
Chase - Only use for 5% categories

Citi - Only use once every 6-months for $5 on a cable bill (oldest account to keep it open)
Local CU - Citi - Only use once every 6-months for $5 on a cable bill
Mike Scott
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Re: seeking advice how to spend money

Post by Mike Scott »

Are you asking about budgeting or card use?

I use which ever rewards card is best at the moment. I don't use debit cards.
Topic Author
peterwantstosave
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Re: seeking advice how to spend money

Post by peterwantstosave »

sailaway wrote: Sun Oct 27, 2024 9:31 am I spend on whatever card will get me the highest rewards for that purchase. I have several cards to achieve this goal.
thank you
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Topic Author
peterwantstosave
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Re: seeking advice how to spend money

Post by peterwantstosave »

runner3081 wrote: Sun Oct 27, 2024 9:33 am Never, ever use a debit card.

My system, we have 5 credit cards.

Fidelity 2% CB - Use for everything except when situations below apply.

Discover - Only use for 5% categories
Chase - Only use for 5% categories

Citi - Only use once every 6-months for $5 on a cable bill (oldest account to keep it open)
Local CU - Citi - Only use once every 6-months for $5 on a cable bill
This is helpful. Thanks!
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Topic Author
peterwantstosave
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Re: seeking advice how to spend money

Post by peterwantstosave »

Mike Scott wrote: Sun Oct 27, 2024 9:35 am Are you asking about budgeting or card use?

I use which ever rewards card is best at the moment. I don't use debit cards.
I think I'm asking primarily about card use. Can I ask why you don't use debit cards?

thank you!

Peter
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Kagord
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Re: seeking advice how to spend money

Post by Kagord »

Most reward for purchase, I keep a cheat sheet of all active rewards by quarter, and and order in wallet slots by most expected to be used.
Last edited by Kagord on Sun Oct 27, 2024 10:36 am, edited 1 time in total.
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22twain
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Re: seeking advice how to spend money

Post by 22twain »

I have three cards for my personal spending. My default card is an Apple Card because I'm an Apple addict. The other two cards date from before the Apple Card. I used one of them for all my in-person purchases and the other for all my online purchases. I still use both of them occasionally in order to keep them active as backups to the Apple Card.

My wife and I also have a joint card that we use for house expenses, eating out together, travel together, etc. (We manage our personal finances separately, with a joint checking account and credit card for joint expenses.)

We don't chase rewards. We take what we get, but we don't seek to maximize rewards by opening new cards or juggling the use of our current cards.
Principal, not principle. Roth, not ROTH. IRMAA, not IRRMA or IRMMA.
cs412a
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Re: seeking advice how to spend money

Post by cs412a »

peterwantstosave wrote: Sun Oct 27, 2024 9:37 am
Mike Scott wrote: Sun Oct 27, 2024 9:35 am Are you asking about budgeting or card use?

I use which ever rewards card is best at the moment. I don't use debit cards.
I think I'm asking primarily about card use. Can I ask why you don't use debit cards?

thank you!

Peter
I believe consumer protections are better for credit cards.

I primarily use my IHG MasterCard because I earn travel points for hotels that I regularly use when traveling & visiting family.
I use the Costco VISA card for purchases at Costco and when I buy gas (a 4% category).
I have small recurring charges (e.g., cable, Google Fi, etc.) that are put on two other cards to keep the accounts activated
Topic Author
peterwantstosave
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Re: seeking advice how to spend money

Post by peterwantstosave »

Kagord wrote: Sun Oct 27, 2024 9:55 am Most reward for purchase, I keep a cheat sheet of all active rewards by quarter, and and order in wallet slots by most expected to be used.
thanks!
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Topic Author
peterwantstosave
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Re: seeking advice how to spend money

Post by peterwantstosave »

Kagord wrote: Sun Oct 27, 2024 9:55 am Most reward for purchase, I keep a cheat sheet of all active rewards by quarter, and and order in wallet slots by most expected to be used.
:)
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Topic Author
peterwantstosave
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Re: seeking advice how to spend money

Post by peterwantstosave »

22twain wrote: Sun Oct 27, 2024 10:07 am I have three cards for my personal spending. My default card is an Apple Card because I'm an Apple addict. The other two cards date from before the Apple Card. I used one of them for all my in-person purchases and the other for all my online purchases. I still use both of them occasionally in order to keep them active as backups to the Apple Card.

My wife and I also have a joint card that we use for house expenses, eating out together, travel together, etc. (We manage our personal finances separately, with a joint checking account and credit card for joint expenses.)

We don't chase rewards. We take what we get, but we don't seek to maximize rewards by opening new cards or juggling the use of our current cards.
do you recommend the Apple Card?
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Watty
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Re: seeking advice how to spend money

Post by Watty »

Debit cards are toxic. Get an ATM card if possible, some banks will say they do not issue ATM cars anymore but I have pushed to get an ATM only card and it was not hard to get a manager on the 800 phone line to approve it. If you cannot get an ATM card then switch banks or lock the debit card or set the daily limit down to $1 if possible.

Banks really puch debit cards but it gives them so many advantages.

When(not if) your debit card is compromised you will be fighting to get your money back and bounding other checks and payments until it gets cleared up. Banks also do not always resolve disputes in your favor and even when they do it may take months to resolve.

You can easily find non fee credit cards which pay a 2% cashback reward and if you want to "go down the rabbit hole" you can find better deals than that.
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jeffyscott
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Re: seeking advice how to spend money

Post by jeffyscott »

We now mostly carry 3 cards: Citi Custom cash for 5% at grocery stores, Citi Costco for 3% travel, dining, and 4% gas, a 2% card for everything else (in this system double cash is convenient, since then all are Citi cards with one log in).

I do supplement that basic system by using discover and freedom for 5% categories, though most categories (except warehouse clubs) don't amount to much for us. I also US Bank cash+ to get 5% on a couple utility bills, but that doesn't require carrying another card or thinking about where to use it. I also do some sign up bonus offers, such as a current one for a $250 bonus on $2K spending with 3% rebates at Costco.

We going to soon find out if the new US Bank smartly card can simplify things for us, with 4% on everything. That would then really be the only card we'd need to carry. Since most of our groceries are pick-up orders, we can still get 5% there even if we don't carry the Citi Custom Cash card.
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peterwantstosave
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Re: seeking advice how to spend money

Post by peterwantstosave »

Watty wrote: Sun Oct 27, 2024 11:36 am Debit cards are toxic. Get an ATM card if possible, some banks will say they do not issue ATM cars anymore but I have pushed to get an ATM only card and it was not hard to get a manager on the 800 phone line to approve it. If you cannot get an ATM card then switch banks or lock the debit card or set the daily limit down to $1 if possible.

Banks really puch debit cards but it gives them so many advantages.

When(not if) your debit card is compromised you will be fighting to get your money back and bounding other checks and payments until it gets cleared up. Banks also do not always resolve disputes in your favor and even when they do it may take months to resolve.

You can easily find non fee credit cards which pay a 2% cashback reward and if you want to "go down the rabbit hole" you can find better deals than that.
This is helpful. Closed my Fidelity CMA card. (one of my debit cards). Locked the other one for now.
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normaldude
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Re: seeking advice how to spend money

Post by normaldude »

If you want to keep things simple, you could use a 2% cashback visa/MC credit card for all purchases, and have the cashback rewards auto-apply as a statement credit.

That way, you only have to look at one bill each month, and you don't have to juggle rewards.

Here are some lists of cashback credit cards:

https://www.nerdwallet.com/article/cred ... back-cards

https://www.allcards.com/best-cash-back-cards/

https://clark.com/credit-cards/best-cas ... edit-cards
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22twain
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Re: seeking advice how to spend money

Post by 22twain »

peterwantstosave wrote: Sun Oct 27, 2024 11:26 am
22twain wrote: Sun Oct 27, 2024 10:07 am My default card is an Apple Card because I'm an Apple addict.
do you recommend the Apple Card?
It works fine for me. I use it mostly with Apple Pay or by giving the virtual card number to web sites that don't use Apple Pay. I use the physical (titanium) card only a couple times a month. I like being able to use the Apple Wallet app instead of a separate bank app.
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Tundrama
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Re: seeking advice how to spend money

Post by Tundrama »

runner3081 wrote: Sun Oct 27, 2024 9:33 am Never, ever use a debit card.

My system, we have 5 credit cards.

Fidelity 2% CB - Use for everything except when situations below apply.

Discover - Only use for 5% categories
Chase - Only use for 5% categories

Citi - Only use once every 6-months for $5 on a cable bill (oldest account to keep it open)
Local CU - Citi - Only use once every 6-months for $5 on a cable bill
We can respectfully disagree with your debit card advice. No malice here. But, honestly, you are wrong about debit cards. And, that’s ok.
Tundrama
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Re: seeking advice how to spend money

Post by Tundrama »

Tundrama wrote: Mon Oct 28, 2024 5:20 am
runner3081 wrote: Sun Oct 27, 2024 9:33 am Never, ever use a debit card.

My system, we have 5 credit cards.

Fidelity 2% CB - Use for everything except when situations below apply.

Discover - Only use for 5% categories
Chase - Only use for 5% categories

Citi - Only use once every 6-months for $5 on a cable bill (oldest account to keep it open)
Local CU - Citi - Only use once every 6-months for $5 on a cable bill
We can respectfully disagree with your debit card advice. No malice here. But, honestly, you are wrong about debit cards. And, that’s ok.
I guess I’ll add a little more context to my answer. Debit cards are fine. Just like cc’s, there is fraud at times. NBD, you’ll get your money back. I’m a multi millionaire and yes, I drive across traffic to pay three cents less per gallon for gas. This whole credit card thing is fine for those who want them. That said, the anti debit card….World is ending…crowd, is wrong. And, I’ll get hammered for saying this. I don’t own a cc. They don’t make me wealthy in any way.

Use your debt cards. You’ll be fine. You your cc’s, fine by me. But this whole anti-debit card matrix is garbage.
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lthenderson
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Re: seeking advice how to spend money

Post by lthenderson »

peterwantstosave wrote: Sun Oct 27, 2024 9:21 am I have a mix of two credit cards and two debit cards. My spending is sort of all over the place, sometimes on one card, sometimes on another, no real rhyme or reason to it honestly. I don't think I ever learned how to spend in a systematic way.
I keep my spending simple. I put everything I can charge, without incurring extra fees, on a singular credit card that offers 2% cashback on everything. I don't like keeping track of categories and multiple credit card accounts and everything that goes with that. I do keep a second credit card just in case the primary one gets compromised as they do with time and use. I probably average one compromised card every 5 to 8 years. Since it will take a week or so until the replacement card arrives, I use my backup card until then.

Like others, I avoid debit cards and actually don't even have one anymore. I just have an ATM only card. I learned the hard way after my debit card got hacked after 30 years of only using it as an ATM card. Someone charged a night at a resort with it and I was out several hundred dollars for a couple months until it was permanently refunded back to my account after a long review process. My father had a similar incident except they drained his account to the tune of $25,000 before it was noticed. Granted in both cases, we eventually got the money back after review but there are no guarantees that it will happen every time like there are with credit cards.

I occasionally run into places, mostly small businesses, where they will charge you an extra few percent if you pay with credit card to cover the fees the credit card companies charge them. In those situations, I pay by cash if for small amounts or check if for larger amounts. Since I don't carry a check book with me anymore, I have just learned overtime which businesses those are, my local car dealership is one of them, and plan ahead when I know I am heading there.
runner3081
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Re: seeking advice how to spend money

Post by runner3081 »

Tundrama wrote: Mon Oct 28, 2024 5:20 am
runner3081 wrote: Sun Oct 27, 2024 9:33 am Never, ever use a debit card.

My system, we have 5 credit cards.

Fidelity 2% CB - Use for everything except when situations below apply.

Discover - Only use for 5% categories
Chase - Only use for 5% categories

Citi - Only use once every 6-months for $5 on a cable bill (oldest account to keep it open)
Local CU - Citi - Only use once every 6-months for $5 on a cable bill
We can respectfully disagree with your debit card advice. No malice here. But, honestly, you are wrong about debit cards. And, that’s ok.
Someone gets my debit card number, spends 5k. I have 5k in checking, account is empty, payments bounce.

Someone gets my credit card, spends 5k. I dispute, no payments bounce.

To flat out say I am wrong is a little too strong, regardless of your opinion.
feh
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Re: seeking advice how to spend money

Post by feh »

Always use CC, not debit.

Use one CC with 2% cash back. Not interested in anything more complicated.
Caduceus
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Re: seeking advice how to spend money

Post by Caduceus »

lthenderson wrote: Mon Oct 28, 2024 5:33 am

Like others, I avoid debit cards and actually don't even have one anymore. I just have an ATM only card. I learned the hard way after my debit card got hacked after 30 years of only using it as an ATM card.
I don't quite understand what this means. Do you mean that your debit card can only be used for ATM withdrawals but cannot be used for point of sale purchases? Wouldn't a hacker be able to drain your debit account with or without a physical card?
Mrbogleheads
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Re: seeking advice how to spend money

Post by Mrbogleheads »

Are you trolling?
Caduceus
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Re: seeking advice how to spend money

Post by Caduceus »

I like using cash when I have it in my wallet, especially for small purchases. That's because I don't like spending too much time going over credit card statements. I will usually just check the amounts are right directly after paying cash and then it's done and forgotten. I do all spending on a single credit card and usually have just one or two pages on the statement, which is perfect. Some months there are less than 20 transactions.

I also intensely dislike shopping, so I try to do it all at once. For online stuff, I try to stock up on what's needed up to six months ahead. I can go months without purchasing anything else from Amazon. For brick and mortar shopping, I keep a list of things that I prefer to try out in person (clothing, etc.) and then I'm in and out of the mall very quickly. Shopping malls to me are the closest thing to hell on earth - bright lights, bright advertisements, crowded, full of weird scents, noisy. And every store you walk into is just a sensory overload. Really hate it.
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lthenderson
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Re: seeking advice how to spend money

Post by lthenderson »

Caduceus wrote: Mon Oct 28, 2024 7:03 am
lthenderson wrote: Mon Oct 28, 2024 5:33 am

Like others, I avoid debit cards and actually don't even have one anymore. I just have an ATM only card. I learned the hard way after my debit card got hacked after 30 years of only using it as an ATM card.
I don't quite understand what this means. Do you mean that your debit card can only be used for ATM withdrawals but cannot be used for point of sale purchases? Wouldn't a hacker be able to drain your debit account with or without a physical card?
Correct, an ATM only card can't be used for point of sales use, or most importantly, used like a credit card online. Point of sale uses generally required your PIN code so is safe but many online sites would use it just like a credit card (needing only the 16 digits) without needing the PIN making it even less safe than a credit card. An ATM only card only works at an ATM (or brick and mortar bank teller) and one must also have and use a PIN which makes it impossible for a would be hacker to gain access and drain your account.
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Re: seeking advice how to spend money

Post by ScubaHogg »

22twain wrote: Mon Oct 28, 2024 12:44 am I like being able to use the Apple Wallet app instead of a separate bank app.
If you are referring to actually paying for a product, you can use the apple wallet app with virtually any credit card
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22twain
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Re: seeking advice how to spend money

Post by 22twain »

ScubaHogg wrote: Mon Oct 28, 2024 9:06 am
22twain wrote: Mon Oct 28, 2024 12:44 am I like being able to use the Apple Wallet app instead of a separate bank app.
If you are referring to actually paying for a product, you can use the apple wallet app with virtually any credit card
Sure, but for non-Apple cards, the Apple Wallet shows only the purchases that you make using Apple Pay, and you can't make payments. You still need the bank's app to see all transactions on that card, and make payments.
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furwut
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Re: seeking advice how to spend money

Post by furwut »

If you are chasing rewards there is an app called CardPointers that may be useful.
Caduceus
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Re: seeking advice how to spend money

Post by Caduceus »

lthenderson wrote: Mon Oct 28, 2024 8:49 am
Caduceus wrote: Mon Oct 28, 2024 7:03 am

I don't quite understand what this means. Do you mean that your debit card can only be used for ATM withdrawals but cannot be used for point of sale purchases? Wouldn't a hacker be able to drain your debit account with or without a physical card?
Correct, an ATM only card can't be used for point of sales use, or most importantly, used like a credit card online. Point of sale uses generally required your PIN code so is safe but many online sites would use it just like a credit card (needing only the 16 digits) without needing the PIN making it even less safe than a credit card. An ATM only card only works at an ATM (or brick and mortar bank teller) and one must also have and use a PIN which makes it impossible for a would be hacker to gain access and drain your account.
Is it a function that you can call in to turn on and off? Meaning, it's the same debit card but you call into your bank to say you want to disable point-of-sale purchases? Or is it a different kind of card altogether? I don't remember ever using my debit card for point of sale purchases so now I'm curious if mine's an ATM only card or debit card.
2behappytoday
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Re: seeking advice how to spend money

Post by 2behappytoday »

I am in the " I do not want a debit card" camp. Upon request both my credit union and regional bank where I have checking accounts cancelled the debit card each routinely sent and issued me ATM cards instead. Each card says ATM Card on the front of the card and the word "debit" does not appear on either card, front or back.
Gecko10x
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Re: seeking advice how to spend money

Post by Gecko10x »

I typically use my Apple Card when I can tap-pay, because that nets me 2% back into my Apple Cash balance. The integration is nice.

If I can't tap, or for online purchases, I use my M1 card which nets 1.5%-10% depending on the merchant. Those rewards are auto-deposited into my brokerage once a month, which auto-purchases my investments, no interaction from me.

I used to be staunchly in the anti-debit camp, but since we moved two things happened: 1) Our new credit union account gives 2% cash back on the account balance up to $25k if we debit a certain number of purchases, so I put the minimum number on auto-pay on the debit card. 2) Our new grocery store doesn't take credit cards, only debit/cash/check. Since I don't carry much cash and I'm not writing checks every week, we use the debit card there.
adamthesmythe
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Re: seeking advice how to spend money

Post by adamthesmythe »

Caduceus wrote: Mon Oct 28, 2024 7:19 am Shopping malls to me are the closest thing to hell on earth - bright lights, bright advertisements, crowded, full of weird scents, noisy. And every store you walk into is just a sensory overload. Really hate it.
Never ever visit Japan.
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lthenderson
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Re: seeking advice how to spend money

Post by lthenderson »

Caduceus wrote: Mon Oct 28, 2024 6:32 pm
lthenderson wrote: Mon Oct 28, 2024 8:49 am

Correct, an ATM only card can't be used for point of sales use, or most importantly, used like a credit card online. Point of sale uses generally required your PIN code so is safe but many online sites would use it just like a credit card (needing only the 16 digits) without needing the PIN making it even less safe than a credit card. An ATM only card only works at an ATM (or brick and mortar bank teller) and one must also have and use a PIN which makes it impossible for a would be hacker to gain access and drain your account.
Is it a function that you can call in to turn on and off? Meaning, it's the same debit card but you call into your bank to say you want to disable point-of-sale purchases? Or is it a different kind of card altogether? I don't remember ever using my debit card for point of sale purchases so now I'm curious if mine's an ATM only card or debit card.
I can't speak for all banks but for my bank, it was a different card. It says "ATM Card" on the front and doesn't have a VISA or other credit logo like my debit card had. It has a computer chip and a sixteen digit number but if I recall, the number was different than the one on my debit card when it was switched. I had to call the bank and request it specifically.

My bank does allow you to switch any card you own on or off so theoretically, you could just turn your debit card off and just turn it on whenever you want to use it to retrieve cash from an ATM and you could probably accomplish the same thing as having an ATM only card.
MoreTaxes
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Re: seeking advice how to spend money

Post by MoreTaxes »

lthenderson wrote: Mon Oct 28, 2024 7:30 pm I can't speak for all banks but for my bank, it was a different card. It says "ATM Card" on the front and doesn't have a VISA or other credit logo like my debit card had. It has a computer chip and a sixteen digit number but if I recall, the number was different than the one on my debit card when it was switched. I had to call the bank and request it specifically.
I had a similar experience. I had to call my credit union to get an ATM card. It says "ATM" on it and doesn't have VISA or other credit card logo. It has a 19-digit number and on the back it has the logos of the ATM networks it works on.

I'm sure there are several considerations for using or not using a debit card, but for me, the main weaknesses of a debit card vs. a credit card are:
  • Rewards. Debit cards don't offer good rewards, if any. Credit cards paying 2% are easy to come by, and 3% or even 5% is possible in limited situations. That can be thousands of dollars a year, depending on your spending.
  • Fraud protection. After a fraudulent transaction, your checking account is missing the money immediately and you have to win a dispute to get it restored. This could put you at risk of bouncing other checks or payments. With a credit card, you don't owe anything during the dispute and by law you can't be held responsible for more than $50.
  • Float. A debit card withdraws the money from your account at the time of sale. A credit card floats you an interest-free loan until the statement closing date plus 25 days.
runner3081
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Re: seeking advice how to spend money

Post by runner3081 »

Gecko10x wrote: Mon Oct 28, 2024 7:05 pm Our new grocery store doesn't take credit cards, only debit/cash/check. Since I don't carry much cash and I'm not writing checks every week, we use the debit card there.
Let me guess… Winco?
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jeffyscott
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Re: seeking advice how to spend money

Post by jeffyscott »

MoreTaxes wrote: Mon Oct 28, 2024 10:26 pm
  • Rewards. Debit cards don't offer good rewards, if any. Credit cards paying 2% are easy to come by, and 3% or even 5% is possible in limited situations. That can be thousands of dollars a year, depending on your spending.
  • Fraud protection. After a fraudulent transaction, your checking account is missing the money immediately and you have to win a dispute to get it restored. This could put you at risk of bouncing other checks or payments. With a credit card, you don't owe anything during the dispute and by law you can't be held responsible for more than $50.
  • Float. A debit card withdraws the money from your account at the time of sale. A credit card floats you an interest-free loan until the statement closing date plus 25 days.
Yes, even as low spenders, using credit cards earns us about $600 per year in rebates and interest on the float (not counting any sign up bonuses or 0% introductory rates). In effect, using a debit card (or cash) would be like paying a fee of $50 per month for the "privilege" of paying that way, instead of with credit cards.

Even if we returned to the days where the best you could do with a credit card was no annual fee and 1% rebates, why would I want to forgo $200-300 per year in free money?
Gecko10x
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Re: seeking advice how to spend money

Post by Gecko10x »

runner3081 wrote: Tue Oct 29, 2024 5:51 am
Gecko10x wrote: Mon Oct 28, 2024 7:05 pm Our new grocery store doesn't take credit cards, only debit/cash/check. Since I don't carry much cash and I'm not writing checks every week, we use the debit card there.
Let me guess… Winco?
Ha, yes.
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