Tips for everyone to give, take, share on saving money

[Fear The Spear]

I don't have any credit cards, I only have a debit card.
But I remember hearing somewhere that it's safer to choose the "Credit" method, instead of the "Debit" method. So I choose that method every single time I swipe it.
So, assuming it's safer than choosing the Debit option, would you go as far as saying that choosing the Credit option on a Debit card, is actually equivalent, security-wise, to using an actual credit card for the transaction ?

 

[tshile]

That depends entirely on your bank. The reason it may be safer is two fold:
- you're not typing in your PIN. That, be default, makes it safer. Someone that skims your card doesn't get your PIN number
- your bank doesn't process it as an immediate transaction and take cash directly out of your account. so if it's stolen, and used as a credit card, you have an opportunity to find the transaction and cancel it before money is withdrawn from your account.

The key is catching fraudulent transactions before you pay for them. With a credit card no money is withdrawn from your account until you get a bill at the end of the money and send a check in for it (or log in and pay with an e-check.) You have an opportunity to review all charges before agreeing to pay for them.

With a debit card money is removed from your account at the point of transaction (or shortly thereafter.) When you get your statement at the end of the month all the money for those transactions has already left your account - you've already paid for them.

When you're fighting fraudulent charges it is infinitely easier on you if your real money hasn't left your account yet. Then the bank/credit card company has to cancel it (you can refuse to pay for it) and the battle is now between the merchant and the credit card company/bank.

If you've already paid for it your bank/credit card company may transfer responsibility back to you, and now that responsibility is between you and the merchant(s?). Good luck with that. Even if you do win and get your money back, there's a good chance you're going to spend majority of your time fighting without said money. There are a lot of people that can't afford to be without $5,000 for 3 months while they fight a slew of fraudulent charges that had the money withdrawn from their accounts. If you have a really crappy bank then you can add to any money missing the fees they will charge if the account is overdrawn. Yes, that does happen.

It all depends on your banks. In general banks have gotten better over the last 4 years, but it's still a wide range of protection that banks offer and there don't seem to be any standards in the industry.

That's why credit cards are safer. So, how safe using your credit card option on your debit card depends entirely on how your bank processes that transaction. If they're just delaying the time it takes to remove the money from your account by 2 days then no - I don't think that's safer. If they're sending you a statement at the end of the month that you have to cut a check for to have the items paid for then yes, for all intents and purposes that's as safe as a credit card (as long as the terms don't give the bank the right to just pull money out of your account for it)

Most stories of people actually losing money revolve around the use of a debit card. It's a direct line to a cash account you have with the bank. When that cash is gone, it's gone. That's a **** time to find out how good or bad your bank is with fraud protection.


Edit: Based on Ren's story it sounds like Bank of America is taking care of their customers. You cannot assume your bank is that way, and if you aren't going to stop using a debit card then you should at least spend 10 minutes figuring out what your bank's policies are. Pay special attention to any time limits - they may promise to refund any money on the spot, but in small print that may say within 15 days of the transaction or something. BOA is the only bank I've heard of being hassle free when it comes to this with debit cards. I'm sure there are others, but the bulk of the stories I run into are hellish nightmares where people are without their money for 2-3 months while things are investigated. Even then, the banks only return what they can get back themselves. So if the person stole $2,000 from you but the bank can only recover $1,200 the other $800 is on you.

You have to be very careful what you sign when you report it to your bank and go in, they'll have you sign all kinds of paperwork. Make sure none of it is you agreeing to only hold the bank responsible for refunding whatever portion of the money they can recover - they should refund 100% of fraudulent charges, not just whatever they can 'recover.' I have a buddy that made that mistake last month when his PS3 account was stolen and used to buy porn and rent movies online...

 

[Fear The Spear]

That depends entirely on your bank. The reason it may be safer is two fold:
- you're not typing in your PIN. That, be default, makes it safer. Someone that skims your card doesn't get your PIN number

At gas stations, instead of asking your PIN, it asks you for your billing zip code. Is that any safer than typing in your PIN ?

- your bank doesn't process it as an immediate transaction and take cash directly out of your account. so if it's stolen, and used as a credit card, you have an opportunity to find the transaction and cancel it before money is withdrawn from your account.

I check my bank account online, on a daily basis, and have noticed that even tho I always choose the credit option, it hits my account immediately. Although, it DOES go into the "Pending Transaction" column for a day or 2, before hitting the final transaction column. I'm not sure if that means it's not immediately "taking my funds" and whether I actually have a day or 2 while it's pending, to dispute it

 

[Nobody]

I check my bank account online, on a daily basis, and have noticed that even tho I always choose the credit option, it hits my account immediately. Although, it DOES go into the "Pending Transaction" column for a day or 2, before hitting the final transaction column. I'm not sure if that means it's not immediately "taking my funds" and whether I actually have a day or 2 while it's pending, to dispute it

I know from an unfortunate experience that if you want to dispute a pending transaction, you have to wait until it's already posted. Which sucks.

 

[tshile]

At gas stations, instead of asking your PIN, it asks you for your billing zip code. Is that any safer than typing in your PIN ?

Zip code was a new security feature when running a card I think maybe 2 years ago? Lately I've been seeing random questions - sometimes zip, sometimes area code or phone number, etc. It doesn't seem as common though.

It's technically safer than your PIN, but in general you don't want anyone else to have that information. If I have your card number and your pin/zip I can very easily program my own credit card and use it just like yours. It's just a magnetic strip that's been programmed. It's kind of like a barcode. Very easy to duplicate. So in general you want to keep that information to yourself by covering your hand while typing it in.

I check my bank account online, on a daily basis, and have noticed that even tho I always choose the credit option, it hits my account immediately. Although, it DOES go into the "Pending Transaction" column for a day or 2, before hitting the final transaction column. I'm not sure if that means it's not immediately "taking my funds" and whether I actually have a day or 2 while it's pending, to dispute it

You would have to speak to your bank about how they handle that and read their policies. They're all different. My experience is you cannot contest a transaction until it is posted, even with credit cards.

 

[Fear The Spear]

So, whether you're typing in a PIN or a Zip Code, as long as you cover up the numbers you're punching in, are you safe ?
It almost sounds like the skimmer itself is only picking up information from the swipe, but not able to electronically scan what you're typing. So, thus, they can only depend on a camera to get the information you're typing, as opposed to the swipe. Is that correct ?

(all this talk about swiping, and for some reason, it has me thinking about toilet paper)

 

[tshile]

Yes. Skimmers are used with cameras. The skimmer reads your magnetic strip, the camera records your pin. Covering your hand is safer than not

If you have any more questions about it pm me or post them in the tech thread I made, I covered this in there. We've gone well outside the intent of the thread and that's my fault, so I'd like to move the conversation if it needs to continue

 

[Fear The Spear]

It still amazes me how crooks can install these without going noticed, and/or without the business having knowledge of it.
I mean, the surrounding establishment typically has it's own video cameras for their own business security, so how can they not detect someone installing both a skimmer and video camera ? Either the business is a major fail on security, or they're in cahoots with the crooks

 

[Fear The Spear]

We've gone well outside the intent of the thread and that's my fault, so I'd like to move the conversation if it needs to continue

Hey, learning how not to get robbed, is a great way to save money

 

[Nobody]

There's another tactic being employeed by these evil bastards too. Some of the people are using flir cameras so that even if you cover your hand, once you leave they see the residual heat left on the buttons you've pushed. The fewer buttons you push, the fewer possible combinations they have to try and work through. And if you are typing in your zip, it will be a lot easier, generally because you spend more near home, to deduce what your zip is.

 

[Fear The Spear]

Extreme, as you can see around you, we're gradually moving toward a cash-less society.
What will you do, then ?
If we don't become completely cash-less relatively soon, we will be very close to cash-less. A lot places already take only credit cards. I went to an automated paid parking lot, and the machine would no longer accept any bills or coins. Only credit cards. And speaking of driving, even toll booths are starting to become cash-less. Some toll roads no longer are using human man-power, or even coin-collecting machines. You drive through the scanner at the toll booth, and you either have an account set up with the toll road (that you could only pay online or over the phone with a credit card) or if you don't have an account, it sends you a bill in the mail, by taking a photo of your license plate - as they've completely removed human manpower labor, as well as cash-taking machines.
This of course saves them money on paying people to operate those locations, as well as the people needed to fetch the cash from the machines.

 

[Nobody]

Extreme, as you can see around you, we're gradually moving toward a cash-less society.
What will you do, then ?
If we don't become completely cash-less relatively soon, we will be very close to cash-less. A lot places already take only credit cards. I went to an automated paid parking lot, and the machine would no longer accept any bills or coins. Only credit cards. And speaking of driving, even toll booths are starting to become cash-less. Some toll roads no longer are using human man-power, or even coin-collecting machines. You drive through the scanner at the toll booth, and you either have an account set up with the toll road (that you could only pay online or over the phone with a credit card) or if you don't have an account, it sends you a bill in the mail, by taking a photo of your license plate - as they've completely removed human manpower labor, as well as cash-taking machines.
This of course saves them money on paying people to operate those locations, as well as the people needed to fetch the cash from the machines.

Society will never switch to cards. I have never personally seen anything or any place in my life that was card only. If anything, there are way more places that are cash only than anything.

Besides, the vast majority of people have credit problems. One reason cash will always be king.

 

[Fear The Spear]

You are not taking debit cards or check cards into consideration with that. Credit problems don't prevent people from getting those. They're basically like "secured credit cards" with a deposit

 

[Nobody]

You are not taking debit cards or check cards into consideration with that. Credit problems don't prevent people from getting those. They're basically like "secured credit cards" with a deposit

Have you ever walked into a bank, told them you have horrible credit, then try to open a checking account? Tough to do my friend.

 

[tshile]

Taking care of your credit rating is probably the most important thing you can do. Credit ratings impact your buying power as a person. Buying power is significantly more important than how much money you make, what your debt is, and what you have in the bank.

If you have bad credit you get higher interest rates - on everything. When you're looking at a car the difference between a 2% loan and a 9% loan has a huge impact on what you can buy. Housing is the same thing - in my area rent for a 2 bedroom apartment is the same as my monthly mortgage. The difference? An apartment doesn't require a down payment for one, but the other is that having poor credit can make that mortgage unaffordable and maybe even unattainable.

Your credit rating is also hard to repair - it can be done, so if your credit rating is bad don't be discouraged you can fix it. But you're much better off starting on the right track than going down the wrong one and trying to get it turned around.

I find a lot of people, specifically younger people, greatly underestimate the importance of their credit rating. I have many friends that pissed their credit rating away when we were in our 20's - they severely regret it now.

Edit - oh and despite what you may think, having no loans or credit cards doesn't help you either because then you have no credit. Try to go get a decent loan on a car when you're 27 and have no credit history - they'll give you very high rates like you have bad credit. A buddy had this happen to him, and he was complaining. He paid cash for everything and finally wanted to buy a car on a loan and they gave him an outrageously high interest rate. He felt he was wronged because he'd never gone wrong on a loan before.

I tried to explain to him (he didn't get it or didn't agree with me) that when you have no credit rating then a lender has absolutely nothing to go on about how good you are at paying your bills on time. They have nothing. So you're high risk due to a lack of information.

 

[Fear The Spear]

Have you ever walked into a bank, told them you have horrible credit, then try to open a checking account? Tough to do my friend.

Yes, and it depends on the bank. Some banks, it's not issue.

 

[Fear The Spear]

Taking care of your credit rating is probably the most important thing you can do. Credit ratings impact your buying power as a person. Buying power is significantly more important than how much money you make, what your debt is, and what you have in the bank.

If you have bad credit you get higher interest rates - on everything. When you're looking at a car the difference between a 2% loan and a 9% loan has a huge impact on what you can buy. Housing is the same thing - in my area rent for a 2 bedroom apartment is the same as my monthly mortgage. The difference? An apartment doesn't require a down payment for one, but the other is that having poor credit can make that mortgage unaffordable and maybe even unattainable.

But if you have really bad credit, it usually means that you're in a poor financial and income position, so you're both willing and forced to make compromises, by not buying cars from dealers, but from individuals instead and pay cash, where your credit rating is not only not an issue, but you're also not getting ripped off with huge mark-ups by dealers, and un-necessary interest rates.

I have both bad credit and low income, so I'm not able to pay off my debts to repair my credit, so I've accepted the fact, that I'm restricted to buying used cars, and from individuals and not dealers, and grown content with the older, cheaper models, that are the only ones I can afford to pay cash on.

I am resigned to the fact that my financial limitations have forced me lower standards with the cars I buy, the living conditions, etc. So, even though my credit is bad - worrying about my credit rating is really not an issue, because I simply make the necessary adjustments, to not depending on sources that require good credit, but using the appropriate alternatives.

It's basically accepting very limited resources, and making the most of them......until my income improves. Which is also what this thread is basically about - making the most out of something small.

And you'll notice, further reflection of all of the above in my PC situation as well, because in the "Tech-Assistance" thread, you'll see I'm trying my best to get by with a much older model PC for as long as I can, by replacing parts instead of upgrading the whole PC, because I cannot even afford to dish out more money for a newer model PC.

 

[tshile]

My Amex Costco check just came. 3 months worth of gas, bills, lunches at work, and Christmas shopping netted me over 500. No interest paid and the only annual fee is keeping my Costco membership active. It has to be cashed at Costco but there is no charge for that and you don't have to spend it there. Not a bad deal for money I would have spent anyways

 

[Fear The Spear]

My Amex Costco check just came. 3 months worth of gas, bills, lunches at work, and Christmas shopping netted me over 500. No interest paid and the only annual fee is keeping my Costco membership active. It has to be cashed at Costco but there is no charge for that and you don't have to spend it there. Not a bad deal for money I would have spent anyways

Yes, but when you went to spend that $500 on an airline flight, did it have blackout dates ?

 

[tshile]

oh that's my wifes card. it advertises no black out dates but we haven't actually used it yet. things like that tend to not always work out as advertised for some reason

mine was just a check made out to me as a cash back rewards bonus. the only catch is it has to be cashed at Costco.