credit cards

[stark]

i'm new ... can debit cards be used for everything a credit card can? like online purchasing and stuff... and even offline, are they accepted everywhere that accepts cc's?

[Troll King]

You need a credit card for online purchasing. There may be exceptions (Paypal I believe allows use of debit cards) but for the most part, credit cards are the most accepted form.

The other difference is of course the limits. Credit cards give you a spending limit based on your credit rating (if you aren't sure what that means, it's basically a system like experience points you earn for using your credit card and paying back the money promptly) and other factors. With debit, the limit is the amount of money you have in your bank account. In most cases, people have more room on credit than they do cash in the bank.

[Jason]

The slightly retarded rodent makes me laugh!

[stark]

but if i was gonna go paypal style, i could just get a checking account, right?

here's the thing, i'm just a wee little boy (i'm 17) with a 22-hours-a-week-$5.25-an-hour job with $82 to my name at the moment (but the weekends over, and thats normally when i blow my money until payday on friday... checking accounts are in general... free? (i'm so new) ... i don't wanna have to like spend all my money on managing my credit card and not have any actual spending money... and do debit and credit cards have like monthly carrying fees or anything? or if i have a cc or debit card and not use them, it won't be costing me money?

[sTuPiD-gErBiL]

most banks give you a free debit card if you open a checking account with them. some banks charge monthly fees for checking, others don't. my bank has no monthly fee, and instead charges 12 cents for each check you write (using the debit card doesn't count towards the 12 cent thing).

from what i've seen, debit cards are accepted anywhere that either credit cards or checks are accepted. i've even ordered things online with my debit card.

[Dayz V@mp!re]

Aww that hurts, six

[bloodzombie]

Originally posted by Troll King
You need a credit card for online purchasing. There may be exceptions (Paypal I believe allows use of debit cards) but for the most part, credit cards are the most accepted form.

The other difference is of course the limits. Credit cards give you a spending limit based on your credit rating (if you aren't sure what that means, it's basically a system like experience points you earn for using your credit card and paying back the money promptly) and other factors. With debit, the limit is the amount of money you have in your bank account. In most cases, people have more room on credit than they do cash in the bank.

My debit card has a visa logo on it, and works for absolutely anything that a visa card would. The only exception I've run into is that some car rental places won't take it because they can only get as much as what's in your bank account if you stole the car.

And your other point is exactly my point also.. I don't want to spend more than the cash I have in the bank.

[bloodzombie]

Originally posted by pv=nrt
having a good credit rating is extremely positive. i got out of college with no credit at all and i will be paying huge iunterest costs if i can't get it up before i buy a house.

This is a good point. If you have good credit, you pay WAY less when you buy a car (especially your first one) or a house.

[IL-76]

One caution on debit cards:

Make sure you have fraud protection. With a regular credit card, you have the benefit of only being on the hook for $50 if your card is stolen and a balance run up. With some debit cards, they are run by individual banks and aren't required to offer the same protection. If fraudulent purchases are made (and remember your card doesn't physically have to be stolen) the money comes out of your checking account and it's just gone. Banks are also not required to offer you the same charge contesting feature. With a credit card you simply contest a charge on your statement within 60 days and you can have a chargeback process started. The debit card at the bank may not offer this at all or only offer a weak form of it.

Credit building is also key. You get nothing from a debit card. When you buy a car, some dealers and banks will see what kind of limit you have on a credit card and double that amount for car purchase approval. No credit reporting with a debit card, because it is only, in essence, an electronic check.

[bloodzombie]

Originally posted by IL-76
One caution on debit cards:

Make sure you have fraud protection. With a regular credit card, you have the benefit of only being on the hook for $50 if your card is stolen and a balance run up. With some debit cards, they are run by individual banks and aren't required to offer the same protection. If fraudulent purchases are made (and remember your card doesn't physically have to be stolen) the money comes out of your checking account and it's just gone. Banks are also not required to offer you the same charge contesting feature. With a credit card you simply contest a charge on your statement within 60 days and you can have a chargeback process started. The debit card at the bank may not offer this at all or only offer a weak form of it.

Credit building is also key. You get nothing from a debit card. When you buy a car, some dealers and banks will see what kind of limit you have on a credit card and double that amount for car purchase approval. No credit reporting with a debit card, because it is only, in essence, an electronic check.

You might be right about the protection, I'm not sure. Siince it has a visa logo, I always assumed it would have the same protection, but I never checked, worth looking into.

The building credit thing is also a good point, when me and my wife bought a car recently, they pulled up my credit and thought that their computer was fucked because "the screen went blank, but we'll try again in a few minutes". Luckily her credit rating is through the roof.

[Fit of Rage]

My view on credit, despite it's gradual replacement of real money, is that it's a necessary evil. Credit rating these days is basically for the soul purpose of establishing yourself economically, and the basis on which people can trust you to pay a debt. Personally, I think credit cards are fine and a great way to build credit, as long as you only use them sparingly for purchases that you pay off slowly over time.

I'm only 16, but I probably won't get a credit card until I've got an associate's degree or something.

[IL-76]

Originally posted by Fit of Rage
My view on credit, despite it's gradual replacement of real money, is that it's a necessary evil. Credit rating these days is basically for the soul purpose of establishing yourself economically, and the basis on which people can trust you to pay a debt. Personally, I think credit cards are fine and a great way to build credit, as long as you only use them sparingly for purchases that you pay off slowly over time.

I'm only 16, but I probably won't get a credit card until I've got an associate's degree or something.

Hey, if you can start building credit sooner than later, you should do so. Car insurance companies are now using credit scores along with your driving record to determine rates. Poor credit/no credit can increase your car ins. rates. Sucks, but true. More and more companies are starting to use credit to evaluate whether to do business with you and to what extent. Utilities will run your credit when you hook up an apartment's power and gas.

Try to get a card ASAP, parents can cosign. I got one at 17 and made an agreement with my parents. I was not allowed to carry it at all. They let me make a family purchase with it every so often to build credit. I learned to read the bill and see how interest would build up and kill me if left unpaid. Then when I turned 18, I was allowed to use it in a limited way until I proved that I was not an idiot. Now, several years later, I have a huge credit limit (that I would never use) that helps me get the best rates on cars or anything else I might later need. Regarding utilities in apartments and stuff... good credit keeps you from having to plunk down big deposits when you hook up. Power companies can require $50-$100 up front just to hook up and hold as a deposit. Gas company same thing. Good credit avoids having to come up with that cash.