Debit Card vs Credit Card

For just about anything you want to get off your chest about credit cards.
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Vattené
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Postby Vattené » Tue Dec 02, 2014 2:59 pm

Using debit for the 1.99% in my checking is just BARELY worth it to me. It is a hassle to keep track of transactions, it will end up being taxed, and it is totally dependent on the balance of the account. When I had several thousand in, it was much more attractive. Now, I am working on building that balance back up. I have never taken the time to do the math, but I should really calculate if the interest earned even makes up for the forgone rewards on those transactions. I may not even go for it this month. The nice thing is it's per billing cycle. If I don't meet the requirements I can just skip it, but still get it next month.
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flan
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Postby flan » Wed Dec 03, 2014 6:42 pm

rockyrock wrote:I've started using my debit card for everyday swipe purchases.


Which is, of course, exactly how most cards are compromised, according to all the data I see.

jeffysdad01
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Postby jeffysdad01 » Wed Dec 03, 2014 6:56 pm

Don't even have a debit card. Tell the bank to send you an ATM only card. Debit cards are stupid. There are no benefits to using a debit card unless you can't control your spending.

Battery111
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Postby Battery111 » Wed Dec 03, 2014 7:16 pm

jeffysdad01 wrote:Don't even have a debit card. Tell the bank to send you an ATM only card. Debit cards are stupid. There are no benefits to using a debit card unless you can't control your spending.


This is exactly what I did. Although I still have the debit card. It just sits in my safe.
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CarefulBuilder14
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Postby CarefulBuilder14 » Wed Dec 03, 2014 7:38 pm

Has anyone negotiated a lower price on a large purchase by offering to pay with a debit instead of a credit card?
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flan
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Postby flan » Wed Dec 03, 2014 7:55 pm

CarefulBuilder14 wrote:Has anyone negotiated a lower price on a large purchase by offering to pay with a debit instead of a credit card?


I've negotiated much better deals offering to pay cash-- well in excess of the credit card discount rate. My assumption was that they were going to commit tax fraud, and electronic payments of any type have too big a record for that.

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CarefulBuilder14
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Postby CarefulBuilder14 » Wed Dec 03, 2014 8:07 pm

flan wrote:I've negotiated much better deals offering to pay cash-- well in excess of the credit card discount rate. My assumption was that they were going to commit tax fraud, and electronic payments of any type have too big a record for that.


It's definitely a widespread practice, and you're right that income and/or sales tax evasion is the primary motivation for the merchant to offer a discount.

I was thinking more of the CC processing fees as a factor. If you're buying a vehicle or major appliance, then the processing fees can be hundreds or thousands of dollars. That should give some room to negotiate debit vs. credit.
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PlyrStar93
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Postby PlyrStar93 » Wed Dec 03, 2014 8:17 pm

flan wrote:I've negotiated much better deals offering to pay cash-- well in excess of the credit card discount rate. My assumption was that they were going to commit tax fraud, and electronic payments of any type have too big a record for that.

I would agree it's more likely because of tax issue, though processing fees do factor in. A few restaurants I have been have 10% discount if the customer pays by cash.

Accodring to some documents I have read, Visa's interchange reimbursement fee for restaurant is no more than 2.40%+$0.10. It is almost impossible to find an acquirer that charges something like 10% discount rate. Even if they are afraid of CREDIT card fees, if they just use PIN DEBIT they should only pay a small amount of plain fee--they don't, and just swipe a debit card as credit. It doesn't make sense if they give THAT much discount if it's just about the credit card fees. Cash transactions are very likely not to be reported to IRS, so it's quite easy for the merchant to avoid paying taxes.
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