If I don't care about holds, is using my debit card a problem?

[viccullen17]

I used my debit card on my cruise in August and I was only charged the initial hold charge of $300 and I only spent $250 that cruise and it was released the day after the cruise ended

[John Bull]

This one is easy.

 

Using a debit card means you are living within your means. Using a credit card, responsibly or not, means you are living outside your means. You may say "untrue! I pay my credit card in full every month".

 

Say you and I are going on a cruise. I use my debit card you use your credit card. The day we get back from our cruise we both loose our jobs. My cruise is paid for and done with. You haven't even begun to pay for yours. When that monthly bill comes are you going to still pay it off in full with no income coming in? What about those other credit cards you have? and your car payment? your mortgage?

 

 

Like Cuizer2 and NBT, I see no logic in those assertions. :confused:

The vast majority of CC users use their card as a charge-card & pay in full monthly. It's safer & more convenient than carrying a stash of cash, it earns discounts, it provides more-than-adequate deposits for hotels, car rentals, etc, and it's an instant form of making a large payment for some emergency without the need to find a bank or ATM.

It has nothing to do with "living beyond your means". :rolleyes:

 

So Cruiser A comes back from their cruise penniless whereas Cruiser B, who used a CC rather than cash, still has enough money in the bank to pay off that CC bill.

I see no significant difference.

In that hypothetical scenario, neither will have the money to pay the car or mortgage - though the CC user does at least have the option of choosing whether settling the CC bill is the most pressing of those payments to make.

 

 

 

Who goes on vacation without at least 6 months - 1 year emergency fund in the bank these days? .

 

Errrrr - quite a lot of us. ;)

 

At one end of the spectrum, why leave tens of thousands in a bank checking account giving little or no return, when it can be earning elsewhere ?

My credit card gives me up to a month or more of interest-free spending in an emergency, that's plenty of time to liquidate assets or switch funds in order to pay it off on time.

 

At the other end of the spectrum, for a number of years I had nothing like 6 - 12 months spending money in reserve - but still managed to take worry-free vacations. Plenty of ordinary working folk are in that situation.

 

-------------------------------

 

I'm surprised that berrieh declined the security of a PIN number for cards. (worth checking whether that affects your credit union's fraudulent-use refund policy???)

The US is the world's capital of card fraud, accounting for the bulk of it. And a major reason is the almost-total absence of PIN technology.

The only time a card of mine has been compromised was in the US.

Most gas pumps don't have a PIN facility, and with my out-of-country card the only way I could buy an indeterminate amount of gas to fill the tank prior to returning the car was by leaving my card with the cashier while I filled.

The card number was used for a fraudulent $3 purchase a couple of months later. My card supplier told me this was the usual routine - a test-purchase to see if it would be spotted.

I incurred no loss, but had the inconvenience of being unable to use that particular card for a few days until receiving a replacement. Note JVilleGal's post on the subject of relying on just one card.

 

Just my own opinion & experience.

And appreciated it doesn't address the OP's basic question. ;)

BTW, the speedier release of holds on debit cards is something I've learned from this thread :). Though it's immaterial to me because my CC credit limit is tens of thousands above my monthly spend and, unlike my debit card, it incurs no foreign transaction fees.

 

JB :)

Edited September 28, 2015 by John Bull

[JVilleGal]

Luckily the OP's financial situation and ours are quite different. Hard to loose a job when you are retired. Like many posters I ONLY use credit cards for the benefits and protection the card offers. Paying in cash can sometimes get you in big trouble..... I'll pay with CC and pay in full that account directly after.

 

But thanks for the interesting story :)

[Hlitner]

Your correct and the OP says the account is not tied to his day to day bills at home. So as the OP says he does not care..... I would also caution against only have one CC or/and ATM card. While on a cruise 2 yrs ago our credit union cut off and closed all ATM cards as they had a massive breach (computer hack). If we only had the one account we would have been completely cut off from our funds. They kept saying new cards were immediately sent out but if you are in Europe and the new card is at home that does not do you any good.

 

My experience is not necessarily your experience, it was just a word of caution. No need to get all excited!

 

You raise an excellent issue (which we often discuss on CC) of backup plans. When we retired and started taking 2 month plus trips we quickly realized that we were very vulnerable if something happened to our ATM/Debit card. So we eventually reached a point (which exists today) where we now have 3 different ATM/Debit cards, each of which is drawn on separate accounts at 1 bank and 2 Credit Unions. 2 of those 3 cards have no fees for foreign withdrawals (except the normal 1% international transaction fee built into the exchange rate). As to credit cards versus debit cards, it is nearly impossible for an independent traveler to move around the world without a real credit card. In many places it is impossible to even rent a car without a credit card (not all rental car agencies will now accept debit cards). We have actually witnessed a couple turned away from a European hotel because they did not have a credit card at registration.

 

In some countries in Europe and Mexico they also insist on a major credit card to admit a patient to a hospital (we assume they would not throw you out the door in a major emergency). Several years ago I went to a hospital in San Sebastian, Spain with acute abdominal pain (similar to appendicitis). At the emergency room when they realized I was from outside the EU they immediately demanded a credit card before I could be seen by a physician. In Mexico (where we live 2 months a year) the hospitals usually insist that you give them a credit card (which they hold) at admission.

 

The sad thing is that there are a substantial number of folks that cannot obtain a regular credit card (because of an abusive credit history). For these folks, independent travel is very difficult to impossible. For some, their only option is to get a special credit card which must always be secured by money in a dedicated account (similar to a debit card). But if these folks try to rent a car where an agency might impose a multi-thousand dollar credit hold they are out of luck. And by the way, cruise lines can have really high credit holds. HAL imposes a $60 per passenger day credit hold which can cause major issues for those with low credit limits. Other lines have similar policies (with differing daily amounts).

 

Regarding rental cars it can become amusing. About 3 years ago we rented a car in Malaga from a major agency. They played the usual game of trying to get us to buy their insurance (which cost more then the cost of the rental) which we refused (we have other insurance that covers us for rental cars). When we refused to buy their insurance (over $40 for a single day) they told us they would put a 30,000€ credit hold on our credit card (a very effective threat to sell their overpriced insurance). Not a problem since we have AMEX, but it was a shocker :)

 

Hank

[BillOh]

Sounds like you have educated yourself on the Pro's and the Con's.

 

 

Go for it

 

I agree, the OP has done a lot of research. Many of the rules have changed fraud wise with debit vs credit cards with fewer differences in many cases. The only thing I would add to the OP, I would definitely call the issuing company and advise them when and were you are using the card. The Debit cards seem to be monitored more closely. I never had a problem using my Royal Caribbean visa in the Caribbean, but if I planned on using my debit somewhere, I would let them know ahead of time.