# Using a debit card instead of CC



## sagsal (Apr 7, 2009)

We pay off our CC every month but I find that every month I am constantly worried about what the final bill will be (I share with my wife) and forced to make a lump sum payment.

Would it make more sense to just use a debit for all purchases since it tracks almost real time in our online account and have a CC for emergencies/travel etc - wouldn't this help us manage our money better?

Not sure if there is an answer but thought I would throw it out there

Thanks


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## lb71 (Apr 3, 2009)

Probably. The benefit of credit cards is that for most of them you can collect some kind of points, you don't actually have to pay for the item unit weeks later, and there is insurance coverage on some items. If you are having a cash flow problem, then perhaps going the debit would force you to better manage your money. However, it seems you have a spending problem if you are concerned that you can't pay your credit card bill each month. So maybe you and your wife should develop some kind of budget to deal with this. 

Even with a credit card, it's not that difficult to track your spending. Just record each purchase in a spreadsheet or something, and aggregate your purchases. You'll be able to tell when your are approaching your limits.


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## stephenheath (Apr 3, 2009)

The two reasons I use a credit card for almost everything are the rewards (2% or 1% cash back depending on if they take Amex or not), and the security risk, especially with all the skimmers out there. Twice in the past two years I have had my debit card frozen because the cops had busted skimmers and my number was listed (I was never out any money), and I almost never use it. Don't forget that if they get your credit card number, you're only out $50, but if they get your PIN # you could be out a lot more, and if they drain money that was earmarked for your mortgage payment/car payment you could be doing a lot of explaining!

As for building up a big lump sum, I'm assuming you're not tracking your spending with Quicken or Money, but you could just pay off the balance each week so it doesn't grow big... just log in, check the balance on your credit card, and pay that amount. That way you don't have a big surprise at the end of the month.


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## kayo (Apr 5, 2009)

I use my credit card primarily because of the rewards, but I also find it easier to track my spending. Everything is listed on my bill clearly. However, I don't wait until the end of the month for the whole bill, I log into my bank account and check my balance once in a while to keep track, so there really isn't any surprises for me at the end of the month.

Quicken and Money are good tools, but I use my own spreadsheet since I only need to log numbers, and I can quickly compare them against previous years as well, so I find that sufficient already. Perhaps that could be a place to start for you to keep track of your spending.


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## frdsmth9 (May 24, 2009)

Cash is king.

Bank did offer me a CC but I refused instead I just use my debit card to withdraw cash.


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## Alexandra (Apr 3, 2009)

I prefer to use a credit card becuase of the rewards I get...I am not sure if there is an equivalent rewards system for debit cards - maybe P C Banking? Credit cards help you to build...credit! So they are good things to have as long as you pay them off each month.

Maybe it would make sense for you and your wife to have your own credit cards instead of the one shared one. Sit down with her and work out a budget so you know how much you can spend on credit as individuals, and then don't ever go over that limit.

I can see how when you share a credit card, you would have a harder time tracking it, because you never know exactly what your partner is putting on the card.


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## Naumko (May 30, 2009)

I go with credit cards as well for the same reason mentioned before: the rewards and basically a 3-4 week interest-free loan provided you pay the entire balance off by the due date.

Rather than being surprised by the bill when it comes in, I log into the credit card website on a regular basis to see as my purchases show up (I also update MS Money with the transactions).

Perhaps you get a card with rewards that is meant just for everyday expenses and call the bank to keep the credit limit low, close to what you plan to spend each month. You may get hung up at a store if you hit your limit, but you at least won't go over.


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## brad (May 22, 2009)

Having gone deep into credit card debt at one point in my life (debt free for eight years now), I am pretty careful about my credit card purchases. Basically I set a limit for myself each month, which is the amount I know I can pay off when the bill comes in, and I treat it like a debit card. If you track your purchases then it's not much different than a debit card: just always know how much you've charged and how much you have left before you hit your monthly self-imposed limited.

Personally I use a debit card for most of my purchases and use the credit card only for online purchases and big-ticket items (travel, appliances, etc.). I suppose I could get more cash back with the 1% rewards if I used my credit card more, but at the interest rates the banks charge I'd probably wipe out my 1% rewards for an entire year if I ever couldn't pay my credit card bill in full. And I think that's what the banks are counting on...sooner or later you're going to hit a cash flow crunch and not be able to pay your entire bill.


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## mogul777 (Jun 2, 2009)

You can track your credit card expenses easily as well so really this is a non-issue. However, since you are more comfortable using a debit card then sure go ahead and do so. The rewards stuff is rumoured to be scaled back to make up for the other imposed cuts to the companies windfalls.


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## CuriousReader (Apr 3, 2009)

I pretty much put all my expenses to credit card - debit card is only being used for cash withdrawals at ATMs.

My reason is that I get extra benefits (points, cashback, etc rewards) by using credit card - some debit have benefits too, but CC benefits usually higher. 

I have no problem charging everything to credit card because I am good at controlling my spending (I never spend on anything I dont need, I always carefully think about what I spend), so I have no problem or surprises at the end of the month in paying the bill


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## CanadianCapitalist (Mar 31, 2009)

stephenheath said:


> Don't forget that if they get your credit card number, you're only out $50, but if they get your PIN # you could be out a lot more, and if they drain money that was earmarked for your mortgage payment/car payment you could be doing a lot of explaining!


I believe you meant debit card number. Security is becoming a huge issue. I've had my credit card compromised twice so far and both times the fraud charges were completely reversed.


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## CuriousReader (Apr 3, 2009)

CanadianCapitalist said:


> I believe you meant debit card number. Security is becoming a huge issue. I've had my credit card compromised twice so far and both times the fraud charges were completely reversed.


Agree with the fraud / other risks related to credit card, but from my experience, Visa has been great with dealing with the stuff, they even call me when I suddenly make a totally-out-of-pattern purchase, they called within 2-3 days of the purchase to verify it.

My girlfriend also had experience with fraud when her card was charged some purchase that clearly she didnt do, Visa reverted the payment within 1-2 weeks.


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## stephenheath (Apr 3, 2009)

CanadianCapitalist said:


> I believe you meant debit card number. Security is becoming a huge issue. I've had my credit card compromised twice so far and both times the fraud charges were completely reversed.


I guess I meant both debit card number and pin number... the point being that it isn't an automatic reversal if they get into you checking account like it is with fraudulent credit card usage, and even if the bank reverses it in a few days, during that time if you had a mortgage payment or car loan come due it could cause you additional problems.


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## Spidey (May 11, 2009)

Excellent point about the security. I've had my card compromised as well, and it was cleared up very satisfactorily. Additionally, credit cards will usually allow you to do a "charge back" if there is a disagreement with a vendor.

For these reasons, and for the points, I use my credit cards everywhere that they are accepted, even for a very small charge. The points add up and I've received a lot of money back (its like free money). I have a debit card but only use it when credit cards are not accepted. 

The one thing to keep in mind is that it is imperative to pay the balance in full each month if you don't want to sabotage your financial future to debt.


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## webworm98 (Jun 22, 2009)

I am from the U.S. I know in the U.S. we can lower are daily authorization limit for are debit card. I didnt know if you can do the same thing in Canada if you decide to use interac cards. 

Partly offtopic

You don't have protection for your interac cards in Canada?

One other thing. I heard some banks will be issuing Visa and Mastercard debit cards in Canada. Dont know if they have. Just what I have read.


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## Bullseye (Apr 5, 2009)

Many of the points addressed here, but I did an article on why credit cards are better than debit a while back with some other benefits;

Debit bad, credit card good


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## webworm98 (Jun 22, 2009)

Bullseye said:


> Many of the points addressed here, but I did an article on why credit cards are better than debit a while back with some other benefits;
> 
> Debit bad, credit card good


Only if your disciplined enough. Some card companies my reduce grace period or have no grace period. Some may even charge annual fee.

Canada has the highest debit(Interac) card use compared to all other countries.

Myself, if your bank allows your to lower your daily authorization limit for your interac card, I would do that but don't lower to much or you couldn't use it on weekends.


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## Bullseye (Apr 5, 2009)

webworm98 said:


> Only if your disciplined enough. Some card companies my reduce grace period or have no grace period. Some may even charge annual fee.
> 
> Canada has the highest debit(Interac) card use compared to all other countries.
> 
> Myself, if your bank allows your to lower your daily authorization limit for your interac card, I would do that but don't lower to much or you couldn't use it on weekends.


Yes, discipline to spend within budget is a key point, I mentioned that, I think.

If you don't have that, I'd recommend people use cash over debit, for the security and costs reasons. Possibly even money jars.


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## webworm98 (Jun 22, 2009)

Do you really have more fraud with Interac pin card in Canada vs US debit card with pin? How come? 

Pardon the long post.



> In case you didn't know here are the type of U.S. Debit cards
> 
> 1. U.S. has restricted atm cards. This only works at your banks atm
> 2. U.S. has an atm cards that will work at just atms (However, this card is becoming obsolete)
> ...


U.S. Debit cards do work on the Canada credit card system or on the Maestro system if correctly activated by their issuing bank. Either method comes out of their checking account. 

One odd thing about U.S. debit cards if the Canadian merchant takes both Interac card and credit cards. U.S. debit card coding makes it appear like it an Interac card, when it is not. It really confuse the Interac system. This is according to what I have read.

If you are a Merchant look for the word checkcard, debitcard, debit or just the word debit in the hologram in addition to Visa and/or Mastercard logo. Then run the card as a Credit or as a Maestro.


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## OhGreatGuru (May 24, 2009)

Theoretically a debit card should be better for budget control, because you shouldn't be able to spend more thtn you have in the bank. But US banks are allowing small overdrafts on debit cards, and collecting billions annually on overdraft fees for this. I haven't been able to find out if CDN banks are doing the same, or making money instead by selling you "overdraft protection" to protect against extortionate penalties. 
The problem I observe with debit cards is that people use them indiscriminately for every little purchase, and don't really "budget" their money. They just spend until it runs out. Taking out cash as a spending allowance is a more effective practice for managing your money.


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## webworm98 (Jun 22, 2009)

OhGreatGuru

Can interac debit card daily authorization limit be lowered? If so, I would advise people lower to $1,000 or $750 this way people would not be out so much if fraud does happen.


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## OhGreatGuru (May 24, 2009)

I don't know, because I practically never use my bank card as a debit card. But I would suspect you can, because I know you can ask to have your credit card limit lowered.


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## Fitzgerald (Jun 29, 2009)

i don't know.........


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## specialk (Jul 14, 2009)

I only use a credit card AFTER I have made an online bank payment to the card, and ONLY when a card is required like booking a hotel etc, this way it is almost like I am not even using it mathematically. The rewards and points etc are usually a bad justification for using a credit card, because studies have been shown that people tend to spend more with a credit card in general, so anything you think you are gaining, is wiped out by the interest and all the impulse spending. I also disagree that security is a good reason to choose a credit card over debit. I would rather take the 1 in a billion chance that someone skims me, rather than risk going deeply into debt to a credit card company...no thanks.
Also, as far as keeping track of your bills.......DO NOT rely on a credit card company to do your accounting for you...that is insane! You should be planning how your money is being spent BEFORE you spend it, not find out where it went afterwards.


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## Cal (Jun 17, 2009)

I check my purchases online...to make sure my card hasn't been stolen (happened to a roommate of mine years ago) and that gives me a pretty good idea as to what the final bill will be.

And yes I put everything on credit to get those travel points. (no fee cc)


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## canadianbanks (Jun 5, 2009)

Using credit card is more convenient for me, and most credit cards have some rewards, which add up quite nicely for a year.


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## Sampson (Apr 3, 2009)

specialk said:


> ...so anything you think you are gaining, is wiped out by the interest and all the impulse spending. I also disagree that security is a good reason to choose a credit card over debit. I would rather take the 1 in a billion chance that someone skims me, rather than risk going deeply into debt to a credit card company...no thanks.


At some point, self control plays a factor. While I agree that many people can get into trouble when dealing with credit, that's not limited to credit cards. how many people have you heard of who borrow against their homes to fund renovations, travel, and other 'superfluous' types of spending.

Budgeting, saving, and buying only if you have the money is a trained skill, you just have to learn how to quell the dopamine released when you buy things - I believe access to a credit card has little to do with this.


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## furgy (Apr 20, 2009)

> Originally Posted by specialk
> ...so anything you think you are gaining, is wiped out by the interest and all the impulse spending. I also disagree that security is a good reason to choose a credit card over debit. I would rather take the 1 in a billion chance that someone skims me, rather than risk going deeply into debt to a credit card company...no thanks.


How is it that impulse spending is limited to credit cards? , if one was an impulse buyer they could just as easily do it on a debit card or cash.

And if you pay your card off monthly , interest is a non issue.


I am a buisness owner and could not do without my credit cards for travel , accomodations , meals , equipment rentals and purchases etc. , for me and my crew.

They are great things when used correctly , it is the people that use them incorrectly that are the problem , not the card itself , kind of like an alcoholic that just cant stop at one drink.

If you can't handle one , don't have one.


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## webworm98 (Jun 22, 2009)

furgy said:


> How is it that impulse spending is limited to credit cards? ,* if one was an impulse buyer they could just as easily do it on a debit card or cash.*
> 
> And if you pay your card off monthly , interest is a non issue.
> 
> ...


Not true, at least for me. I can do better with a debit card, then I can with cash or credit.


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## furgy (Apr 20, 2009)

webworm98 said:


> Not true, at least for me. I can do better with a debit card, then I can with cash or credit.


Then you obviously recognise you may have a problem with access to excessive credit or cash.

And I'm glad to see your dealing with it in a positive way.


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## webworm98 (Jun 22, 2009)

furgy said:


> Then you obviously recognise you may have a problem with access to excessive credit or cash.
> 
> And I'm glad to see your dealing with it in a positive way.


It is not really a problem with cash, I just tend to lose it.


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## cardhu (May 26, 2009)

specialk said:


> I only use a credit card AFTER I have made an online bank payment to the card, and ONLY when a card is required like booking a hotel etc, this way it is almost like I am not even using it mathematically.


Exactly the same as paying the balance in full, every month. 



specialk said:


> The rewards and points etc are usually a bad justification for using a credit card, because studies have been shown that people tend to spend more ...


So Joe shouldn’t use a credit card, because Bill has a problem controlling his spending? 



specialk said:


> I would rather take the 1 in a billion chance that someone skims me, rather than risk going deeply into debt to a credit card company...no thanks.


Let’s see ... there are 6.8 billion people on planet Earth ... so does that mean that in the entire history of the human race, only 7 people have ever been scammed through debit card fraud? Cool. 

Credit card holders have limited liability for fraudulent use ... so how would you go deeply into debt to a credit card company, through fraud? ... it’d have to be something you did to yourself


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## specialk (Jul 14, 2009)

furgy said:


> How is it that impulse spending is limited to credit cards? , if one was an impulse buyer they could just as easily do it on a debit card or cash.
> 
> And if you pay your card off monthly , interest is a non issue.
> 
> ...



The difference with the impulse thing, is that a debit card you can only use money you actually have.

I understand the need in our Country for a credit card in some cases, I was just pointing out that there are other gimmicky reasons that some people get them and use them irresponsibly. I am still waiting for Canada to get the same system they have in the states...you can get a debit card that works EXACTLY like a credit card, only it uses money that you have in your account today. You can book hotels etc, and it has the same fraud protection. This would solve the problem.


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## specialk (Jul 14, 2009)

cardhu said:


> Exactly the same as paying the balance in full, every month.
> 
> 
> So Joe shouldn’t use a credit card, because Bill has a problem controlling his spending?
> ...


1. There is a difference between pre-paying and paying the bill later when it comes in the mail
2. I said "people".....Joe and Bill are both people.
3. Sorry you like to take sarcasm literally
4. I didn't say due to fraud, I meant in debt on a credit card in general, sorry I didn't make that clear...my bad.


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## webworm98 (Jun 22, 2009)

specialk said:


> The difference with the impulse thing, is that a debit card you can only use money you actually have.
> 
> I understand the need in our Country for a credit card in some cases, I was just pointing out that there are other gimmicky reasons that some people get them and use them irresponsibly. I am still waiting for Canada to get the same system they have in the states...you can get a debit card that works EXACTLY like a credit card, only it uses money that you have in your account today. You can book hotels etc, and it has the same fraud protection. This would solve the problem.


I am from the states.
Unless your bank has a high daily authorization limit for debit cards and you have plenty of money in your account. I would advise against using debit cards at hotels and car rentals. One reason, some do not accept debit cards and those that do, will put a large hold on those transactions. That could last a week later then the actual charge.

If you live near the U.S. boarder. You can get a Visa or Mastercard check card at some banks, at least that what I have read. Sorry, no link.


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## cardhu (May 26, 2009)

specialk said:


> 1. There is a difference between pre-paying and paying the bill later when it comes in the mail
> 2. I said "people".....Joe and Bill are both people.
> 3. Sorry you like to take sarcasm literally
> 4. I didn't say due to fraud, I meant in debt on a credit card in general, sorry I didn't make that clear...my bad.


1.	Financially, there is no difference.
2.	Not all “people” have identical spending problems ... therefore, rewards and points may be a perfectly acceptable justification for Joe. 
3.	The point is that debit card fraud is far more prevalent than you suggest. 
4.	You refered to “security” and to “skimming” ... that suggests fraud ... if your concern is a lack of self-control, that is not a security issue. 

At the end of the day, whatever works for you personally, is what you should do ... if you feel you’d be less inclined to splurge with a debit card than with a credit card, and you are willing to sacrifice security in exchange for that control, then by all means go for it ... but it is wrong to assume that all people react the same way to credit ... many people can control their spending just fine, and for those people all the arguments about splurging, etc., are poor justification for avoiding the security benefits of a credit card.

I use debit transactions, but only in limited circumstances, with vendors I trust ... there is a lot of money flowing through my accounts, and the fewer people who have "access" to it, the better.


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## stephenheath (Apr 3, 2009)

Specialk... I'm not saying you shouldn't "pay as you go" on the cards, just one thing I wanted to make sure you knew for when you do that since I learned the hard way 

While I was taking my MBA, I had a payment due for a course... I think it was $1000 or $2000, and I was given the money to pay for the tuition. I was putting it on my card and paying it off as I go because 2% cash back on a total of $35,000 tuition was definately worth it . Anyway, for whatever reason (I think I was going out of town) I made the payment before the charge had cleared, and in response, Amex froze the account and insisted they would only return the payment by mailing me a cheque. This of course meant that (a) my tuition bounced because my card had been frozen and (b) the funds for it would be a week or two to get back to me. Luckily I have a backup Visa so I put it on there, and school was understanding so even waived the nsf fee, and Amex even gave me the 2% I lost as an apology for the inconvenience... but they did say that anytime that happens they have to do that to prevent money laundering.

Anyway, I only mention it in case you make a large purchase, you might want to make sure it hits the card before sending the payment.


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## DAvid (Apr 3, 2009)

I (and many Canadians) don't have a 'debit' card, we have a Client Card, which accesses far more than a single account. Since my Client card provides access to ALL my bank accounts, it gets used at branches of MY bank, and my credit card is used for purchases.

Since my Client Card is not used at independent ATMs, or points of sale, I feel more certain that the security of the card will not be breached. It is an easy step these days to confirm the purchases you have made, and ensure you are not overspending your credit card (just tuck the receipts in your wallet and tally them, or check your balance on line). I, for one, do not need the bank to tell me I'm overspending -- I can keep a budget very well without their help.


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## specialk (Jul 14, 2009)

cardhu said:


> 1.	Financially, there is no difference.
> 2.	Not all “people” have identical spending problems ... therefore, rewards and points may be a perfectly acceptable justification for Joe.
> 3.	The point is that debit card fraud is far more prevalent than you suggest.
> 4.	You refered to “security” and to “skimming” ... that suggests fraud ... if your concern is a lack of self-control, that is not a security issue.
> ...


1. There is a difference between spending an amount of money you have right this second today, and using money you will have later on pay day or whatever....in my opinion.
2. I am basing it on facts and studies that show that most people spend more with a credit card....if that does not include you or many other people that you know...fantastic! 
3. In regards to debit card fraud: approx. 4 billion transactions in Canada per year, and 99.9 percent go through just fine. It affects a fraction of a percent of people, and Victims of debit card fraud will not suffer any financial losses because they are protected by the Canadian Code of Practice for Consumer Debit Card Services.
4. I think you may have misunderstood my sentence where I stated this, but upon reviewing my original statement, I blame myself for typing it that way. I was making 2 separate thoughts, but lumped them into one sentence. My bad.


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## specialk (Jul 14, 2009)

stephenheath said:


> Specialk... I'm not saying you shouldn't "pay as you go" on the cards, just one thing I wanted to make sure you knew for when you do that since I learned the hard way
> 
> While I was taking my MBA, I had a payment due for a course... I think it was $1000 or $2000, and I was given the money to pay for the tuition. I was putting it on my card and paying it off as I go because 2% cash back on a total of $35,000 tuition was definately worth it . Anyway, for whatever reason (I think I was going out of town) I made the payment before the charge had cleared, and in response, Amex froze the account and insisted they would only return the payment by mailing me a cheque. This of course meant that (a) my tuition bounced because my card had been frozen and (b) the funds for it would be a week or two to get back to me. Luckily I have a backup Visa so I put it on there, and school was understanding so even waived the nsf fee, and Amex even gave me the 2% I lost as an apology for the inconvenience... but they did say that anytime that happens they have to do that to prevent money laundering.
> 
> Anyway, I only mention it in case you make a large purchase, you might want to make sure it hits the card before sending the payment.


Ouch, thanks for the tip. However, I would point out that if it were me, I would probably just pay cash for the school if it were an option. I literally ONLY use a credit card when it is an absolutely MUST purchase and a credit card is the only thing they will accept.


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## specialk (Jul 14, 2009)

webworm98 said:


> I am from the states.
> Unless your bank has a high daily authorization limit for debit cards and you have plenty of money in your account. I would advise against using debit cards at hotels and car rentals. One reason, some do not accept debit cards and those that do, will put a large hold on those transactions. That could last a week later then the actual charge.
> 
> If you live near the U.S. boarder. You can get a Visa or Mastercard check card at some banks, at least that what I have read. Sorry, no link.


Thanks for the insight. Given this information though, I would still stand by the debit card....find a bank with a high authorization amount, have plenty of money in the account, and shop around for companies that take them....plan ahead for the hold if there is one. Would that work?


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## webworm98 (Jun 22, 2009)

specialk said:


> Thanks for the insight. Given this information though, I would still stand by the debit card....find a bank with a high authorization amount, have plenty of money in the account, and shop around for companies that take them....plan ahead for the hold if there is one. Would that work?


It should. 
The Canadian Visa/Mastercard debit card will be a little different, unless they have the Nyce or Maestro logo it wont work as a pin purchase in the U.S.
and your bank would have to support foreign pin transactions

Here is detail about the hold
http://en.wikipedia.org/wiki/Authorization_hold

Some banks in the U.S. have instant capture and you can see the preauthorization on online.

For example,
I go to wal-mart. Choose Credit.
A $10.00 hold is put on my account. Which I can see online.
When the $10.00 comes in from the merchant, the hold is released and the $10.00 is hard posted. The key is the funds have to match or the hold stays on for up to 7 business days (Can be up to 30 days but that is rare)

One note, the hotel or car rental should be able to release the hold.


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## LauraLap (Jun 24, 2009)

I use a credit card for any purchase I can and collect airmiles. I then pay it off right away.


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## Jon Chevreau (Apr 4, 2009)

I just got hit personally with debit card fraud and as my column and blog today suggest, the numbers are rising in Canada at almost epidemic proportions. But the new chip technology should curb abuses somewhat. One reader on my blog noted something I'd never considered: people with cell phone cameras should be suspected of trying to see your PIN number.

Details here:

http://network.nationalpost.com/NP/...hive/2010/03/10/more-on-debit-card-fraud.aspx


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## Kirkland (Sep 15, 2009)

Good afternoon.

I live in the UK where the use of debit cards is far more common than Credit Cards, and even far more common than that is just using petty cash.

In the UK there are alot of free ATMs and all the banks cooperate, so having access to your money is very easy and simple and usually not more than a mile away, coupled with debit cards being issued with all accounts and most of them being Visa or Mastercard, they are accepted internationally.

Credit Cards are used here but they are nowhere near as common as the two other alternatives. During my time I've spent in Toronto I see that you have to use your own ATMs as they charge for withdrawel from another bank and most people use Credit Cards due to there points and anti-fraud but I just believe this promotes fraud and builds a credit culture which we dont need these days.

Anyway, just a culture difference!


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## the-royal-mail (Dec 11, 2009)

Jon Chevreau said:


> I just got hit personally with debit card fraud and as my column and blog today suggest, the numbers are rising in Canada at almost epidemic proportions. But the new chip technology should curb abuses somewhat. One reader on my blog noted something I'd never considered: people with cell phone cameras should be suspected of trying to see your PIN number.
> 
> Details here:
> 
> http://network.nationalpost.com/NP/...hive/2010/03/10/more-on-debit-card-fraud.aspx



Yes, this type of fraud, coupled with the outrageous fees assessed by banks, give me all the assurance I need that cash is far safer than plastic will ever be. Carry cash in your wallet for small purchases. The risk of fraud is far more real than any concern about being mugged and having your cash stolen. People who think that their cash is somehow safer by only using plastic are the victim of brainwashing by the issuers of plastic.

It's the same sort of brainwashing used by the cell phone companies 10 years ago to get everyone hooked. "In case of emergency"...yeah sure, how many cell phone users do you know who only use their phone for emergencies?

Same idea here.


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## OhGreatGuru (May 24, 2009)

DAvid said:


> I (and many Canadians) don't have a 'debit' card, we have a Client Card, which accesses far more than a single account. Since my Client card provides access to ALL my bank accounts, it gets used at branches of MY bank, and my credit card is used for purchases.


David, if you have a Client Card, you have a Debit Card. The banks saw no reason to issue separate cards for this. When Debit Card purchasing came in, they simply programmed everyone's client card for this.

For people who can't manage to pay their credit cards on time (and there are a lot of them) debit cards were a better solution to their budget management, because they couldn't spend more money than they had in the bank. 

Then the banks started including "overdraft protection" on client cards, which was another way to let you overspend so they could charge interest.

Now they (or the merchants) appear to be introducing transaction fees. I am always astounded at the number of people I see at checkout lines using bank cards for $5-$10 purchases instead of carrying cash. From the consumer's point of view they could start racking up a lot of service charges. From the merchant's point of view maybe this is why fees are going up. They certainly have to pay hefty fees to Interac/VISA/Mastercard for credit card transactions, to the point where some small retailers have instituted minimum purchase amounts for credit cards. Maybe the same thing is starting to happen with debit cards.


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## OhGreatGuru (May 24, 2009)

I just received notice of RBC seervice fee changes. I notice some accounts have been paying $1.00/transaction for Interac Direct Payment purchases, and this is increasing to $1.50.

Like most banks, RBC has account packages that give a number of "free" transactions in exchange for a flat monthly account fee. If you find your transaction fees are piling up, you should look at whether changing your account package would be cheaper.

PS. I read a few years ago that Canadian banks make half their profit from service fees now, rather than interest. For investors this makes their stocks & dividends less interest-rate sensitive than they used to be. But for consumers it means being nickeled & dimed to death, and you have to hunt for the best fee package for your needs.


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## Dr_V (Oct 27, 2009)

huh, very interesting replies. I have to say, I didn't expect a lot of them. My general views differ from the majority of people in this thread, I'd say. 


(1) For example, one poster suggested that the use of credit cards leads to a society where people are more inclined to carry balances. I think that the causal relationship should be inverted -- it's more likely that people who are inclined to carry balances have credit cards, rather than the other way around. (I have a credit card, and in over 15 years, have never once carried a balance.)

(2) Another poster suggested that cash is far safer than credit cards when it comes to theft or fraud prevention. I'm not sure I agree. If someone pick-pockets a $10 bill from my wallet, it's pretty much gone forever. If someone steals $10 from my credit card account, Visa/Mastercard will promptly refund me and issue me a new (secure) card.

(3) J. Chevreau's blog mentions the risk of scanning RFID information from (chipped) cards. I think that the risk is extremely minimal given that any information of importance is encrypted using a (secure) private key.


K.


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## the-royal-mail (Dec 11, 2009)

And when interest rates become profitable again, will they be reducing these ripoff fees accordingly?

Yes, I used debit back in the 90's when it became common and the fees added up quickly. Heck of a price for what was basically laziness. Today I use cash for smaller purchases (under $20) and CC for most stuff above that amount. I have a no fee card and I pay off my balance on time, every month.

People need to realize their laziness (marketed to us as convenience) is enabling these companies to get away with this nonsense.

God help us if we ever go cashless.


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## the-royal-mail (Dec 11, 2009)

Dr_V said:


> (2) Another poster suggested that cash is far safer than credit cards when it comes to theft or fraud prevention. I'm not sure I agree. If someone pick-pockets a $10 bill from my wallet, it's pretty much gone forever. If someone steals $10 from my credit card account, Visa/Mastercard will promptly refund me and issue me a new (secure) card.


Cash IS safer. Using your numbers, you fear a pickpocket (something I have NEVER encountered, nor has anyone I know) or a mugger (as someone mentioned earlier) to get your $10.

How long have you had this fear?

I would surmise that you've paid that $10 MANY MANY times over in fees. The banks are making record profits on the fear of something that almost never happens. Their fees await this fear, just like cell phone companies await customers for the fear of "emergency". It's brainwashing, plain and simple.

This almost reminds me of the whole argument for postal insurance. Sure, I've had stuff lost in the mail. In about 20 years of shipping stuff I've lost maybe $20 in merchandise. In that time, had I of insured everything (or used debit, as is my parallel here) I would have shelled out THOUSANDS of dollars to the post office. But according to what I'm reading here, I guess the $20 in my pocket (by filing a claim) would have been better? lol


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