Random $984 charge to my card....WTF?!

[flyboy1011]

So I just get on to check my accts today since I got paid and see my checking acct to have a zero balance and then some withdrawn from my savings to make up for overdraft. Needless to say I'm pretty pissed. Had to call the bank and cancel my card, and they said they wont be able to file claims on the charges until they're not "pending" anymore. So heading into valentines day weekend, still having to buy gifts for the female, and dinner on sunday, with a drained checking acct. and no debit card. effing awesome.

[Likwid]

#1 never use your debit card, always use credit

#2 see #1

[zerocrash]

Bummer man. That sucks donkey cock.

[Disclaimer]

#1 never use your debit card, always use credit

#2 see #1

Fearmonger. I <3 debit cards.

Then again, I check my balances once or twice daily.

Plus with new CC regs coming in... a lot will start charging annual fees. I just cancelled my Citcard I had for backup because they were going to charge a $60 annual fee beginning in April.

[flyboy1011]

#1 never use your debit card, always use credit

#2 see #1

credit card is my debit card...don't own an actual credit card

[flyboy1011]

Fearmonger. I <3 debit cards.

Then again, I check my balances once or twice daily.

Same here...I'm real OCD about that stuff.

[Likwid]

credit card is my debit card...don't own an actual credit card

big difference there, CC doesn't have direct access to your money.

Apply for a CC, even if it's a "no credit history" card. No fees, and never carry a balance.

Justin can say whatever he wants Credit Card is necessary for any online purchases or building credit history.... he doesn't have to worry because he already bought his trailer HA!

But in all seriousness, Debit Cards should NEVER be used for anything but withdrawing cash from an ATM. The debit card model was a replacement for checks, it shifts the financial burdon (fees, balance overages, etc etc) to the CUSTOMER.

[Disclaimer]

Well, you show me a CC that earns me the interest rate I get every month, and I'll think about going back to them.

For me, it's all about rewards.

I'm pretty responsible with my card, but no lie, there are disadvantages to using debit cards: http://www.walletpop.com/banking/credit-cards-vs-debit-cards

But like I said, I make bank each month with my Rewards Checking account, so I'll pocket $400+ extra in interest each year over using Credit cards.

Edited February 12, 2010 by JRMMiii

[Likwid]

Well, you show me a CC that earns me the interest rate I get every month, and I'll think about going back to them.

For me, it's all about rewards.

...

That's exactly the point tard If you leave money in your MMA longer you earn more interest, therefore it's in your best interest to postpone when the payment is made to your Credit Card.

Why let the merchant earn interest on YOUR money faster? By using your debit card you lose those assets in your daily average balance and therefore your interest goes down, meanwhile they get instant access and can earn interest on it.

[Disclaimer]

Without disclosing my finances, trust me, I'm making the right moves by using a debit card. Who uses MMAs? That's not even 1% interest....psssh, tard.

http://www.depositaccounts.com/checking/reward-checking-accounts.html

[Likwid]

Without disclosing my finances, trust me, I'm making the right moves by using a debit card. Who uses MMAs? That's not even 1% interest....psssh, tard.

http://www.depositaccounts.com/checking/reward-checking-accounts.html

I get almost 2% plus a 10% bonus on interest if I keep it over a certain amount... but w/e. I'm not down with having all those restrictions "must make certain # of purchases, must use billpay, must..." etc etc

[Disclaimer]

I get almost 2% plus a 10% bonus on interest if I keep it over a certain amount... but w/e. I'm not down with having all those restrictions "must make certain # of purchases, must use billpay, must..." etc etc

2% of what you SPEND, and then 10% bonus on interest... so 10% of 2%, or 2.2%?

I save more than I spend, so... the greater pile of money to earn interest on is the SAVE part, and I'm earning higher interest on that, than you're earning on your SPEND.

Mathematical example - $20k in bank, spending $15k/yr

Your way = 2.2% on $15k = $330 in rewards

My way = 3+% on $20k+ (as more money is saved) = $600+

So, if the convenience of not having "all those restrictions" - which are basically, do your banking online [i do anyway], make 1 ACH direct deposit/direct withdrawal [i average 5 ACH transactions, ex. I pay my electric bill with an e-check from that account], and 12 debit card transactions each month [i use it like I'd use my CC for gas, groceries, etc... I average around 20 each month]...

if those restrictions are too great for you, then you can pay the $280 delta (opportunity cost) for that convenience. And I used a conservative example....

[jbot]

i'm not sure what scenario you could be in that you could do better than having a "high yield" deposit account (whatever that means anymore...), having an intermediate checking account that is simply there to pay bills, and having a credit card with cashback or miles or whatever (depending on what your expenses lay out) that you pay off in full every month and a low interest, no fees line of credit (most often from your home). it is easy to setup bank-to-bank transfers.

this is excluding whatever non-liquid investments or not-immediately able to liquidate investments you have, obviously.

i won't pretend to know more than anyone else on this sort of thing, but if there is a better method, i'd love to hear it.

[jbot]

the thing is though, you keep your money for at least 30 days more with a credit card (earning interest all that time) than you do with a debit card.

so all other factors being equal (same deposit account, but only difference being credit card usage versus debit card usage) you should net more by using a credit card.

[Likwid]

2% of what you SPEND, and then 10% bonus on interest... so 10% of 2%, or 2.2%?

I save more than I spend, so... the greater pile of money to earn interest on is the SAVE part, and I'm earning higher interest on that, than you're earning on your SPEND.

Mathematical example - $20k in bank, spending $15k/yr

Your way = 2.2% on $15k = $330 in rewards

My way = 3+% on $20k+ (as more money is saved) = $600+

Here's the rub, you're not getting 3+% on your OUTGOING money, you're getting 3% on what remains in your account.

So let's do a month by month example to better illustrate, simple numbers.

You put $1,000 in your account on 1/1

You spend throughout the month $400.

At the end of the month your balance is $600

Assuming a monthly compounded interest rate you'd get interest of 3% of $600.

I put $1,000 in my account on 1/1

I spend throughout the month $400.

At the end of the month my balance is $1,000.

My credit card balance is $400

Assuming a daily compounded interest rate (common for MMA) I'd get interest on $1,000

Then pay off my credit card (which gets a 1% cash back, 5% for certain purchases) and earn minimum 1% of $400.

So after 1 month I've earned interest (or cash back) on $1,400 ($1,000 2%apy 1 month = $1.67 + $400 1%apy 1 month = $.33)

You've earned a slightly better interest rate on $1,000 ($600 3%apy 1 month = $1.50)

Because of a larger AVERAGE balance (and daily compounding) I'll earn $2.... you'll still earn $1.50

Edited February 12, 2010 by Likwid

[Disclaimer]

The rewards checking accounts (RCA) only work if you have a large chunk saved up to begin and you SAVE more than you spend. I.e. It's for SAVER-type people that have a liquid emergency fund.

RCAs all have a cap to the amount they're going to pay a high yield on, above the amount the rate drops (I've seen it range anywhere from 1.5%-0.4%). After I get a certain amount in my account (usually right near the interest rate cap), it gets moved to my investment portfolio to earn higher interest, which also reduces the exposure to fraud (like Matt mentioned) - but my debit card TOS has similar Consumer fraud protection measures as a normal Visa/Mastercard credit card. The protection is just through my credit union, not Visa.

[Disclaimer]

Here's the rub, you're not getting 3+% on your OUTGOING money, you're getting 3% on what remains in your account.

(Jew math removed to prevent large post)

Yes, that's how the initial math works out... but assuming you're SPEND is relatively normal each month... your SAVE will continue to rise, doing subsequent months calculations you'll find the BEP (which will be < year) where the rewards checking account is a MUCH better option. You assume you start with a ZERO balance, which isn't the case... you have to initially fund the account (like in my previous post).

[jbot]

which is perfectly fine... but it would still net you more money to have a credit card. lol

[Likwid]

Yes, that's how the initial math works out... but assuming you're SPEND is relatively normal each month... your SAVE will continue to rise, doing subsequent months calculations you'll find the BEP where the rewards checking account is a MUCH better option. You assume you start with a ZERO balance, which isn't the case... you have to initially fund the account (like in my previous post).

Spend vs save is irrelevant, you're never earning interest on outgoing money unless you're using a rewards/cashback CC.

At the end of the year we've both saved the exact same amount, and we've both spent the exact same amount. The difference will come from the fact I'm double dipping rewards and you're only reaping the benefits one time.

Commmme on, you're going to argue money with me?!

[Disclaimer]

I'm well aware of your heritage, but I come from a poser-Jew mother, and my background is in numbers and simulation.

You're wrong. Excel will prove me victorious in this discussion, I'll have to run the numbers offline...

[Likwid]

I'm well aware of your heritage, but I come from a poser-Jew mother, and my background is in numbers and simulation.

You're wrong. Excel will prove me victorious in this discussion, I'll have to run the numbers offline...

I'll be anxious to see. There isn't a way yours will come out being more assuming everything else is equal. UNLESS your account is compounded daily. In which case you'll edge it out because the amount of money collecting interest will average the same.

[Uncle Punk]

I will put the Amish up against the Jews any day when it comes to keeping their money. You guys know Justin is Amish don't you.

[Likwid]

I will put the Amish up against the Jews any day when it comes to keeping their money. You guys know Justin is Amish don't you.

I thought he was Mormon. He's protesting getting married because he can only have one wife.

[Uncle Punk]

No, he is protesting getting married so he can keep his money.

[Disclaimer]

you guys crack my shit up.

I'm Mennonite. Amish don't use electricity. I've been on Rumspringa going on 27 years almost.