WARNING: LONG POST!
First here's information from
this site to help you understand charge vs. credit cards:
Credit Cards vs. Charge Cards
Many people use the terms credit card and charge card interchangeably, but there are important differences. In general, a credit card lets you make purchases for which you are billed later. Most credit card accounts allow you to carry a balance from one billing cycle to the next; however, you have to pay interest on that balance. Usually, you have to pay at least a certain amount of your balance each time you receive a bill.
A charge card is a specific kind of credit card. The balance on a charge card account is payable in full when the statement is received and cannot be rolled over from one billing to the next. Because you cannot carry a balance, a charge card doesn't have a periodic or annual percentage rate, so there is no rate for a charge card issuer to disclose.
For using a bank debit/credit card exclusively, there are good and bad sides. First (in my opinion) the good side is you can have that money directly from your account and if you don't monitor your account alot then it gives you a more accurate picture of your financial situation if you just glance in to get an account balance or something of the sort. Its good for people on budgets, and what I use right now because sometimes we "overspend" when we know we have a few thousand available on the credit line. (Internet is bad for that) Honestly, that is the only GOOD thing I can give you from that perspective.
Now the BAD part about using your bank debit/credit card:
First I'm going to ask that you and read
this:
Go ahead, I'll wait ...
(if you didn't read the link you'll get lost because I'm not going to spell it all out)
After you've read that you see what the Fed says about
ETF (there's more infomation about ETF there on the Fed's website, and how it states:
The financial institution must promptly investigate an error and resolve it within 45 days.
and
However, if the financial institution takes longer than 10 business days to complete its investigation, generally it must put back into your account the amount in question while it finishes the investigation.
I'm going to be frank, do not use your credit/debit card if you don't have to. I try to use debit only at places I'm familiar with or at a bank and I really dislike using the credit portion of the card (for security purposes) but sometimes you are on a budget and maybe it helps. I dislike the credit portion of the card because rarely anyone ever checks signatures and honestly the back of my card ISN'T EVEN SIGNED and I've had this account for well over a year and not once have I been asked to show it.
- When someone gets your bank information like a credit/debit card then can clean you out. Then you have to wait usually at most 2 week by federal law to get ANY of that money back. I worked in a bank and you have no idea how many headaches I have seen with the process of going through reporting it, then when they realize their account is a negative balance and all their checks bounce, etc etc. Also you aren't responsible but for up to $50 if reported within 60 days but again, if your account is cleaned out (which most often it will be) you are broke for that period of time until your claim is approved.
- The other thing I might suggest is getting a
"debit only" card where you have to know your PIN in order to access your money. I know quite a few people who do this (mostly because they were burned in the past). And with credit card scammers out there, all they need is you "credit card number" and if you use your bank credit card, your account can be lost.
- Ok another thing about bank credit cards that many people don't know, once you charge your credit card whatever the amount of that purchase is put on "hold" from your account. The merchant has 5 business days (if I remember correctly, it might be up to 7) to claim that money or it is put back into your account. So using this for hotel reservations or anything where you want to get a refund is a pain (I learned this the hard way). As well as some charges DO NOT show up right away until the merchant processes the sale on their end. A good example is most gas stations. They will show up on your account (if you saw a real time picture of it) as $1 until its processed. Otherwise that $1 is "on hold" on your account. Usually customers don't see all of this because most merchant processing is done pretty quickly but sometimes you might "overspend" if you aren't keeping a checkbook ledger or knowing exactly how much you have.
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So, for piece of mind, I alway use credit cards with purchases (ESPECIALLY ON THE INTERNET) because its easier to dispute charges and you don't have to worry about not having money. As well as with credit cards you can also rack up "rewards" on rewards cards which I love. I have a rewards card where I get back about $100 every 3-4 months. (I've been spending alot recently though
).
Again, this is mostly MY outlook on my finances, I'm sure others might have different philosophies. But working with the people who have an account balance of -$3,583.42 and now all their checks are bouncing is EXTREMELY stressful. Actually I know quite a few people who have had their accounts messed with and now I pretty much make it a point to check my balance at least 2-3 times a week to make sure. (Call me paranoid but I have seen it happen TOO much).
Hope some of these ramblings helped!
Mushy
