Credit Card Fraud (maybe not from my trip but...)

[SRF]

Paying with a credit card for the points is not paying more.

 

Only if you overspend and do not pay it off when due does it cost more.

 

If you don't want perks, get a cash back card.  So that you get money back on every dollar you spend.

 

How would that be costing you more?????

[pacruise804]

It has been reported that people spend more with credit than with cash.  Sales increased dramatically at fast food and vending machines once they started taking cards.  Obviously there is a finance charge cost for carrying a balance, but there are also hidden costs if you spend more where you make your purchases even if you have the funds to pay it off when due.  If someone makes an impulse purchase (still paying it off, so no interest) they no longer have that money for an emergency fund, to invest, or pay down other "good" debt like mortgages.  

 

Emergencies can happen too between when you made the charge (and had the money) and when the bill is due.  Most people can juggle things enough to still not hit any finance charges, but there is added stress during a time when more stress isn't needed.

 

I understand that I am potentially missing rewards by not using a credit card, but I'm ok with that.  I do get rewards from my bank each time I swipe, I get discounts (or avoid transaction fees) by using ACH or cash, I still have Visa protection, and some places I shop don't take any credit card (farmer's market, some restaurants).

 

If someone wants to use credit and enjoy the perks/cash back, I respect that.  I'm not trying to convince anyone to change, just explaining what I do since someone asked why anyone would use debit.  It's a shame my choice can't be respected too.

[clo]

On 11/1/2019 at 9:49 AM, pacruise804 said:

Ultimately, personal finance is personal. 

THIS!^^^^^^  Although I can't help but worry that some people are cruising when they really can't afford it long term.  But they can deal with that later.

[SRF]

22 hours ago, pacruise804 said:

If someone makes an impulse purchase (still paying it off, so no interest) they no longer have that money for an emergency fund, to invest, or pay down other "good" debt like mortgages.  

 

Emergencies can happen too between when you made the charge (and had the money) and when the bill is due.  Most people can juggle things enough to still not hit any finance charges, but there is added stress during a time when more stress isn't needed.

 

And this is no different if you are strictly cash.

 

You can make impulse purchases.

 

You can emergencies that you do not have funds for.

 

Credit card is a medium of exchange.  It may be used safely and provide benefits to the user.  And it can also lead to problems.  But it is NOT the credit card that CAUSES the problems, it is the USER.

 

You do it the way you want, and I will do it the way I want.  And I will still wonder why you would give up a 2% rebate on everything you spend....

[pacruise804]

Wonder away, but if the vendor doesn't take credit then I'm not giving up any rebate.  If I can save 3% and pay $97 per hundred versus paying $100 and only getting $2 back, then I am not giving up anything.

 

I agree that credit cards, like money, are amoral - not immoral.  They are a tool that can be properly used but are also more likely to be able to cause problems.  Only houses with mortgages get foreclosed, only financed cars get repossessed, and only borrowed money risks finance charges.  Does it happen to everyone who uses debt - of course not - but that doesn't negate it is still a risk.

 

The cash spender can make impulse purchases, but historically makes less.  The cash spender can have emergencies but also generally have a larger emergency fund. 

 

You do it the way you want, I will do it the way I want.  I won't wonder why you don't switch because you are happy with your way and it works for you.  As long as you don't ask me for financial advice it really isn't my business 😉   If someone asks why someone wouldn't use credit though, I will answer the question.

 

 

[SRF]

Yes, it would not make sense to pay a 3% surcharge to get back 2%.

 

But 95% or more of my purchases do not offer a cash discount or lower price.

 

So I pay the same with cash or card, but get 2% back.  So I am getting a 2% savings for using the card.

 

You are just coming with various outer fringe cases to justify how you live your live.  There is no one right way for ALL situations.  But if you are happy with all cash, then do that. Most of the rest of the world will use some combination.

[iancal]

Since retiring eight years ago we travel frequently.  Often four months a year of international travel. 

 

We carry several credit cards but only use one for foreign charges. The card that does not add a 3 percent fee to foreign transactions.   At home we use these cards when we cross border shop or more often to purchase air, cruise, or hotels on line outside our country..  Neither of our two cards for this account have ever been compromised.  We keep close tabs on the account when we travel. 

 

The cards that we use at home have been compromised.  Several times.  We have never seen a connection between using our cards overseas, using them on line, or using them at home.  I suspect our chances of having a card compromised are the same at home or when we travel.   Most times when we travel none of our cards are kept in an RFI protected enclosure.  They are in a pouch that hangs inside my shirt.

 

Edited November 6, 2019 by iancal

[pacruise804]

6 hours ago, SRF said:

Yes, it would not make sense to pay a 3% surcharge to get back 2%.

 

But 95% or more of my purchases do not offer a cash discount or lower price.

 

So I pay the same with cash or card, but get 2% back.  So I am getting a 2% savings for using the card.

 

You are just coming with various outer fringe cases to justify how you live your live.  There is no one right way for ALL situations.  But if you are happy with all cash, then do that. Most of the rest of the world will use some combination.

 

I prefer real world examples to explain, rather than "outer fringe to justify." Thank you for acknowledging that there is no one right way.

[iancal]

The card we use for FX saves us 3 percent on foreign transactions.  Plus the usual rental car coverage etc and oddly enough emergency auto road service at home.   It also  gives us one percent cash back vs. the cards we use at home that yield 2-3 percent cash back.  It is a no fee card.

[Truluv]

Just as a quick postscript to my original post, I was fortunate that the bank caught this so quickly.  It's my 1st experience with credit card fraud.  I arrived home around midnight from my 2 week cruise & days in Rome, and the charge was put through the same day (around 6 am).  The bank sent me the fraud alert almost immediately.  The bank delivered a replacement card to my door the next day.  I used that card for some automatic payments, and it took me about 2-3 hours to switch them over to the new card -- but it's done now!   As I had noted in an earlier post, I guess there's some humor in the fact that the person trying to use my credit card fraudulently had used the name of a hindu god! 

 

The discussion about the merits of using credit vs. cash has been interesting.  I had generally used cash, until a co-worker told me that he and his wife were going to Australia courtesy of their credit card company.  They use a 2% cash-back card for every purchase possible, including utlility payments and other expenses that accept credit.  After all, the majority of restaurants, phone companies etc. don't offer a cash discount so the 2% is a price reduction/rebate.  My coworker said that they accumulate enough on their card to pay for a nice trip every few years.  I've tried to emulate them.  I don't spend nearly enough to pay for a trip to Australia, but I have earned over $1K in free cash thanks to this strategy.  There are a few stores like Home Depot where I've been offered a lower price for a large purchase if I paid cash, so this isn't set in stone.  Strategic use of credit cards is just one more tool available to consumers.

Edited November 6, 2019 by Truluv

[pacruise804]

Thanks for the update. Catching and switching all the auto payments is the biggest pain since there isn't liability.  Glad you can find some humor in your situation 🙂 

[SRF]

Part of the reason I do not do auto payments.

 

I just set up the proper payment amount and date each month.

 

If I have to change cards, no problem.

[pacruise804]

Some subscription services request a CC on file.  We also get a discount on some services by being set up to auto renew.

 

For the most part I prefer auto payments, as I it is simpler when traveling.  Just another example of how we can all be different and choices/options are good.

[luv2trvlnow]

One another thing to consider is that part of your credit score is based on the variety of credit you have.  Credit cards are part of this.  If you are disciplined and only charge what you really need and can pay off without incurring interest charges you could be increasing your credit score.  We don't worry about interest rates on loans because we don't have any loans.  But something to consider is that insurance companies use credit scores as part of the formula for the rates they charge you.  So credit cards could raise your credit score which could result in lower car and home insurance premiums.  Like it or not most insurance companies use credit scores as part of their rate determination.

[clo]

2 minutes ago, luv2trvlnow said:

One another thing to consider is that part of your credit score is based on the variety of credit you have.  Credit cards are part of this.  If you are disciplined and only charge what you really need and can pay off without incurring interest charges you could be increasing your credit score.  We don't worry about interest rates on loans because we don't have any loans.  But something to consider is that insurance companies use credit scores as part of the formula for the rates they charge you.  So credit cards could raise your credit score which could result in lower car and home insurance premiums.  Like it or not most insurance companies use credit scores as part of their rate determination.

We just recently bought a small, barely used motor home.  Because of our credit score in the mid800s, they offered us a finance plan that was hard to turn down.  (We'll pay it off way quicker than the term.) And also a great deal on the insurance.  Like you we have no debt but that was a nice benefit.

[pacruise804]

32 minutes ago, luv2trvlnow said:

One another thing to consider is that part of your credit score is based on the variety of credit you have.  Credit cards are part of this.  If you are disciplined and only charge what you really need and can pay off without incurring interest charges you could be increasing your credit score.  We don't worry about interest rates on loans because we don't have any loans.  But something to consider is that insurance companies use credit scores as part of the formula for the rates they charge you.  So credit cards could raise your credit score which could result in lower car and home insurance premiums.  Like it or not most insurance companies use credit scores as part of their rate determination.

 

It's been long enough since we paid off the mortgage that we actually no longer have a credit score.  While it is a part in the rates, we did not see a drastic jump in home insurance and the auto was much more from a teen driver 😄 It was worth mentioning though, thanks.

 

27 minutes ago, clo said:

We just recently bought a small, barely used motor home.  Because of our credit score in the mid800s, they offered us a finance plan that was hard to turn down.  (We'll pay it off way quicker than the term.) And also a great deal on the insurance.  Like you we have no debt but that was a nice benefit.

 

How can you have no debt but have something financed to pay off?

 

While it isn't FICO reportable I guess I do have one outstanding obligation still.  Our cell phones came with a steep discount as long as they were paid in monthly installments (no interest) rather than paying in full. 

[pacruise804]

Getting back (slightly) to the original topic:

If you do have a compromised card and have a cruise booked, check if you need a new card on file for your cruise 🙂 

[clo]

3 hours ago, pacruise804 said:

How can you have no debt but have something financed to pay off?

 

Well, it's "debt" but for us not really debt as the % is so low that we'll make more keeping our money invested.  And we chose not to take a large amount all at once as the market has had some kinda wild swings.   And our monthly payment will likely be 10x what the required one is.  So I apologize for not being detailed enough.

[Philob]

4 hours ago, luv2trvlnow said:

But something to consider is that insurance companies use credit scores as part of the formula for the rates they charge you.  So credit cards could raise your credit score which could result in lower car and home insurance premiums.  Like it or not most insurance companies use credit scores as part of their rate determination.

 

In California insurance companies can no longer use credit scores as part of their underwriting.

[pacruise804]

1 hour ago, clo said:

Well, it's "debt" but for us not really debt as the % is so low that we'll make more keeping our money invested.  And we chose not to take a large amount all at once as the market has had some kinda wild swings.   And our monthly payment will likely be 10x what the required one is.  So I apologize for not being detailed enough.

You don't need to defend yourself to me.  I'm sorry if I came across as harsh 😞 I thought I included a wink face to my question post to keep it light hearted but I don't see it.

 

[luv2trvlnow]

1 hour ago, Philob said:

 

In California insurance companies can no longer use credit scores as part of their underwriting.

That is great if you live in one of the 3 or 4 states that no longer use credit scores as part of their underwriting, but it is something for people living in the other 46 or 47 states  to consider.   

[clo]

2 hours ago, pacruise804 said:

You don't need to defend yourself to me.  I'm sorry if I came across as harsh 😞 I thought I included a wink face to my question post to keep it light hearted but I don't see it.

 

I appreciate this.  Sincerely.

[clo]

2 hours ago, luv2trvlnow said:

That is great if you live in one of the 3 or 4 states that no longer use credit scores as part of their underwriting, but it is something for people living in the other 46 or 47 states  to consider.   

I understand that prospective employers are using it as one way to evaluate candidates for jobs.

[pacruise804]

I have heard credit score is also used in security clearance for some government/military jobs.  My understanding is negative credit can disqualify, but no credit is not an issue.

[SRF]

20 hours ago, clo said:

Well, it's "debt" but for us not really debt as the % is so low that we'll make more keeping our money invested.  And we chose not to take a large amount all at once as the market has had some kinda wild swings.   And our monthly payment will likely be 10x what the required one is.  So I apologize for not being detailed enough.

 

It all depends on circumstances.

 

We bought a vehicle, where the manufacturer offered 1.9% financing.  Inflation rate was about 5 - 6% at the time.

 

Hmm, no wonder we financed every penny of the purchase. 😄