I treated some F*cker to McDonalds and Rite-aid.

[MrPopo]

If I can't afford it, then I don't need it.

This is not a strong argument against credit cards. I purchase absolutely everything on my credit card and pay it off in full each month. I certainly do not use it to purchase anything I cannot afford. What I gain from credit cards are the convenience of NFC (virtually all cards here in Canada have it) and I earn enough in points each month to buy around $60 worth of free groceries. You are actually losing money if you do not use a credit card, because every card comes with some sort of reward system that can be put to practical use.

It's also good because it gets your credit rating up, which is important when you need to take out a loan for things such as a house.

[Michi]

If I can't afford it, then I don't need it.

This is not a strong argument against credit cards. I purchase absolutely everything on my credit card and pay it off in full each month. I certainly do not use it to purchase anything I cannot afford. What I gain from credit cards are the convenience of NFC (virtually all cards here in Canada have it) and I earn enough in points each month to buy around $60 worth of free groceries. You are actually losing money if you do not use a credit card, because every card comes with some sort of reward system that can be put to practical use.

It's also good because it gets your credit rating up, which is important when you need to take out a loan for things such as a house.

Bah! Forlorn doesn't need a loan for a house. He's going to build that shack in the woods with his own two hands, lovingly crafting it out of the lumber he had to buy piece by piece from the local lumber yard because he insisted on paying in cash and they didn't trust him enough to accept anything over $50. Then he'll sit in his hobo cabin with his oil lamp and write that anti-credit card manifesto he's been outlining.

[Jimmy Yakapucci]

I have had my debit card taken twice. Both times it was caught by the fraud dept. until they could get a confirmation/denial from me. The first card was just a couple low dollar feeler purchases. The second time it involved a membership at a well known on-line dating service. Not the usual thing that you see bought with a stolen card number. Both times I had to get the card cancelled and a new one issued. The neat thing is that to get my new card, I just go to my local branch of my credit union and they make me one on the spot. Less than 10 minutes total in the office to cancel the old one and make me a new one. The only restriction was that for the first 24 hours, I could only use the ATM in the lobby there at that credit union.

I had them freeze my card a third time, but when I called them they had flagged it for some purchases that I did make. I told them to send it through and everything was fine.

A friend of mine had his card frozen while he was out shopping early one 'Black Friday'. You can be sure that nobody in line was upset about that adding to the trouble.

[gtmtnbiker]

I've only had to cancel my credit card once because of some pharmacy charge in Spain years ago. No issues getting the charge reversed, etc.

The nice thing about credit cards is the bonus offers you can get for signing up. For instance $500 from American Express, $300 for Chase Freedom, $650 for Chase Sapphire, etc. You can make some serious dough churning these cards over the course of a year.

[Bikeage]

I forgot about this in my earlier post, and even though I was only indirectly involved it is marginally gaming related so I think i'll mention it.

A couple of years ago myself and a group of four others were working at a three day event in central Tennessee. We had a company credit card to use for the hotel and meals, and for that purpose it was only used three or four times.

A few weeks after returning my boss, who i'm closely related to and knows me pretty well, calls me and asks if I know anything about "buying XBox Live on the company card". I was confused, and it took a minute to realize he discovered charges for XBLA points on this credit card.

After explaining to him what they were and that I would not be stupid enough to buy points with stolen info (I would have bought myself something nice and not incriminating at least!) we deduced that the card must have been compromised at either the hotel or few restaurants it was used.

So my next question was did he call Visa and Microsoft to dispute the charges... he did, but surprisingly Microsoft was uncooperative in disclosing any information as to whose account purchased those points. Figured they could at least identify the Gamertag and ISP. All they were willing to do was ban that card from being used, which was a moot point since he already cancelled it through Visa.

So in the end he filed a claim and his money was refunded, but because of Microsoft's lack of giving a fuck we will never know exactly who was responsible.

[fastbilly1]

How to fix this problem? Don't use a credit card. Happy ending.

Because debit cards and prepaid cards cannot be the victim of fraud.

I only use cash, and prepaid cards are only good for the money I put on them, which will be the exact amount needed and no more. I avoid anything that could leave me in debt like the plague. If I can't afford it, then I don't need it.

Thats actually a very valid way of living for many aspects of your life. 90% of financial advice Ive had to read the last few years was simply spend less than you make, but when it comes to some things it is impractical to use cash. Case in point Housing. Buying a house is expensive, and paying in cash is nigh impossible. I use cash for everything and have a lot in the bank, but I cannot buy a house in cash unless I buy a manufactured home on a small lot - when you get into six figures it gets tricky. I will be putting 50k down on my house so I can get a 15 year loan instead of a 30.

I have two credit cards for purchasing gas and buying things online, but I pay for everything I can in cash. My father in law only pays in cash and it is not uncommon for him to be walking around with several hundred in small bills on him. But he is a 6'9" county sheriff that is always carrying his .44 revolver. He is not the kind of person to get mugged...

[MrPopo]

I prefer to use credit cards for almost all my purchases because of the convenience, but I make a point to never carry a balance across months. Like you said, the best financial advice is to not spend money you don't have.

[Ivo]

The nice thing about credit cards is the bonus offers you can get for signing up. For instance $500 from American Express, $300 for Chase Freedom, $650 for Chase Sapphire, etc. You can make some serious dough churning these cards over the course of a year.

Sorry to call you on it, but I seriously doubt this is correct. Banks don't usually give away free money, that isn't in their best interest
Those offers must come with some relevant "fine print" that ensures the bank gets their due.

Ivo.

[MrPopo]

The nice thing about credit cards is the bonus offers you can get for signing up. For instance $500 from American Express, $300 for Chase Freedom, $650 for Chase Sapphire, etc. You can make some serious dough churning these cards over the course of a year.

Sorry to call you on it, but I seriously doubt this is correct. Banks don't usually give away free money, that isn't in their best interest
Those offers must come with some relevant "fine print" that ensures the bank gets their due.

Ivo.

The "fine print" is terrible interest rates if you carry a balance. Similarly, there are reward cards which can be divided into two categories based upon if they charge a monthly fee or not. For example, the Amazon Visa has no monthly fee and you earn points on purchases for cash back or various equivalents. I believe the interest rate is terrible, but I've never encountered it, so it's been free money.

[gtmtnbiker]

The "fine print" is terrible interest rates if you carry a balance.

Visa/Amex make money in two ways. One is that they get a percentage (1-3%) of every purchase made with the card. Secondly, they collect interest rate if you carry a balance.

With the Chase Sapphire card, I got 50K points. But there's an annual fee of $50. I also had to make $3K worth of purchases in 3 months. That's pretty easy when you use the card for everything (gas, groceries, stuff). So when I got the 50K points, I converted it to $625 worth of Amazon gift cards. So my net was something like $575 ($625 - $50).

The reason they offer these incentives is to attract people (hopefully big spenders) to the card who will continue to keep it.

Like MrPopo, I never carry a balance on my cards. As soon as I get them, I setup auto-payment that will pay the balance in full every month.