Here is an interesting article about using credit versus debit when making purchases.
"Paper or plastic? Credit or debit? These are the questions that haunt consumers as they head to the checkout line every day. I can't help you with the bags, but I can ease your burden on question number two. With only a few exceptions, you are better off sticking with credit cards and using debit card only to get cash at ATMs."To read the entire article, follow this link at MSNBC:
Which do you use and why?
Read the article and agree with it.
However, I use a debit card almost entirely. I bank with a credit union. I also have learned my lessons about handling credit/debit with traveling and generally in life. When ATMs began, I nickeled and dimed myself to poorer with charges! What a lesson!
#1, Learn how to best use your money which includes knowing what kind of financial institution is best for you. i.e. If my credit union charged for use of my debit card, I would find another credit union, AND I would tell them and everyone why! As long as people will pay-- the institutions will charge..... remember! there is POWER in your mouth and coming together as a group-- see AARP.
#2. If I'm traveling, I notify my credit union, and I put cash back for that trip! There is NO safer way to carry "money" when traveling than your debit card-- especially with foreign currency. The charges are there, and you need to know them. I've found them to be minimal and less than traveler's checks.
#3. I use a debit card because I'm lousey with cash in my pocket! I will check my bank daily via internet and know exactly where I am. This works very well for me.
#4. The portion of the article about credit cards and auto rentals is exactly correct-- and words to remember.
I'm interested in others experience-- I learn constantly!
A problem I've seen occasionally with debit cards is that when you deposit your paycheck, it may not clear for several days and until it does, you can't use your debit card. Most banks will cash a paycheck immediately, but not all banks and not all paychecks. Before you choose a debit or credit card, it's essential to find out what your bank will do for you and your paycheck.
For people who cash their paychecks at the local money store, it's worth switching over to a checking account with a debit card, so they can pay their bills, manage their money, keep a record of it, start saving, and not walk around with a lot of cash in their pockets.
Then they can work on getting a credit card. For that, they need a good credit rating, which they can get by getting a Visa card through their bank that they pay for in advance. Typically, people put $500 or $1,000 in the account, purchase an item on credit for less than that amount, and then make monthly installment payments on the Visa card. After a year of consistent payments, the customer gets his cash back with interest, and he has a decent credit rating that shows he can handle making monthly installment payments. Then he can apply for a credit card.
Identity theft is a problem the author did not address. With notice of a theft, the bank protects the money in the cardholder's account, but I think it's more dangerous to a customer to have her credit card stolen than her debit card. A person with credit cards has a credit rating that will be destroyed by an identity thief; a person with a debit card may have less to lose, with no credit rating or a bad one already. Besides, what thief is going to walk into Tiffany's and put a diamond ring on a debit card? Could that happen?
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