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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: New here! Have questions!||Date: 5/6/2013 1:06 PM|
|Author: Fuskie||Number: 306972 of 307556|
I will just use my ATM card in the future for online purchases, and maybe just use the card to buy gasoline or something,
I assume you mean a debit card and would strongly discourage this thought. First, debit cards do not carry the same consumer protections that your credit cards have, and what your bank promises takes time to resolve, during which time you could be out the money in your checking account. This can especially be a problem when buying online from a retailer with whom you may not be familiar or have built a trusted relationship.
As for gasoline, when you use a debit card at the pump or sometimes even with the attendant, your debit card as a preliminary hold placed on it fir a much larger amount than your actual total for filling up. This money is essentially withheld from your checking account until the debit transaction is cleared a day or two later. This abuse of your bank account can cause you to be hit with insufficient funds penalties even when you had enough money in the account, because the as station has hijacked your account until their payment clears.
I don't think using a credit card for larger online purchase, or even gasoline, paid in full monthly is necessarily bad. In today's world it's practically a fact of life. That said, smaller purchases paid off monthly is better for rebuilding a credit history due to a lower debt to credit ratio. You just have to find the right balance that let's you live your life while at the same time builds your future.
Who notes that on your credit history, even when paid off each month, the total amount charged on a credit card is what is reported as your high balance each month, not how much you paid...
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