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Okay...a quick update. New job is going well. (knock on wood) My new bf is back. (At least he's less nervous than before, and has been calling me again.) I'm waiting to hear about my student loan consolidation. *See my note on the Paying off Student Loan Board for more info* And I've figured out if I'm careful I can pay off my Car Loan by December 25th. (cross your fingers) OH...and I sold my cars, got money for one, and expect money for the parts car within 2 weeks.

Now...here's my question. When I pay off my secured Credit card (13.9% rate,) should I just go ahead and close it? It only has a limit of $500 and I figured I can just put the money that I was gonna pay on the card every month (expecting to use it regularly) into my savings account and use my Debit card instead. It's a Visa Debit card, so can be used most anywhere.

Any thoughts on this? I was thinking of applying for a lower interest rate card, but do I really need one? I can use my Debit card for things I need a CC for. (it's VISA afterall.) Should I just say, the he** with paying interest??

Of course I won't be able to postpone payments by a month, but....
is it worth it?

Any thoughts or comments would be appreciated.

Thanks.

Lady Ianna

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The only thing that I have heard, and it's strictly anecdotal, is that if you purchase goods on the debit card you don't have the consumer protection you have with the credit card. Not sure about the liability issue either; what happens if someone filches your debit card and goes nuts? Sure, they will stop when your bank acct's empty, but that's still a blow. I'd find out from your bank about these issues before I went strictly with a bank debit card with a Visa/MC brand logo on it.

We once put a downpayment for a bedroom set on the Amex. It was at This End Up, and nobody told us that it was going BK and assets were being liquidated... went back the next week, found a note on the empty storefront, and whipped out my cell phone that second to call Amex and dispute the charge. Took a month or so, but they credited my account and as far as I know, "TEU Holdings" (the parent company, I guess) has silently folded. Except that we keep getting mail every six months about a class action lawsuit from some ambulance chaser or another.
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Any thoughts on this? I was thinking of applying for a lower interest rate card, but do I really need one? I can use my Debit card for things I need a CC for. (it's VISA afterall.) Should I just say, the he** with paying interest??


After you pay it off, if you pay the balance in full every month you shouldn't have to worry about interest. What if you buy something and have to return it or need to dispute it for some reason? Better to have the cc company's money tied up than money from your checking account.

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The only thing that I have heard, and it's strictly anecdotal, is that if you purchase goods on the debit card you don't have the consumer protection you have with the credit card. Not sure about the liability issue either; what happens if someone filches your debit card and goes nuts? Sure, they will stop when your bank acct's empty, but that's still a blow. I'd find out from your bank about these issues before I went strictly with a bank debit card with a Visa/MC brand logo on it.


Many banks will give you the same purchase protection that a CC company would.

LadyIanna,

I think your plan to use the debit card instead of the secured CC is a good one. Also, if it is secured, you'll get your deposit back, right? And you could use that to pay down something else? Or save it! Do you have another CC or was the secured one the only one? It might be worth keeping it open (or opening a different CC account) if it doesn't cost much (if anything) to maintain it -- just in case you have an emergency that you can't handle with the debit card/cash.

Cassandra
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I think a debit card is great for everyday and small purchases. I'll use it for anything but airline tickets and big-time durable items (like appliances, electronics, etc.). My bank is outstanding when it comes to sticking by its customers, so I'm not worried about fraud/theft when it comes to using my card.

However, for large purchases, I would consider having a credit card handy, but only if you can get one from a reputable issuer. As other posters have mentioned, if something goes bad with a card purchase, you probably have more recourse with a credit card than a debit card. Of course, this assertion assumes that your credit card issuer wants to offer good service. Also look at credit cards for programs that extend your warranty, provide insurance for when you travel, etc. Many free cards offer these programs.

With a limit of $500 on your current card, I'd say it's not worth keeping with some exceptions. The biggest exception being: do you need to build your credit (i.e. you can't get any other kind of card)? If so, keep this one and continue to pay the entire balance each month. If not, look around for another lender that will give you a card with a higher limit and no annual fee, just to keep around for the types of purchases I mentioned above.

Good luck
-z
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Many banks will give you the same purchase protection that a CC company would.

The pain in the A$$ that you have to deal with in disputing a charge on a CC is much, much less than the one you have to deal with disputing fraudulent charges on a debit card. The debit card is your actual, real money and banks frequently won't give provisional credits to you checking account for the amount of the disputed charge the way your CC will. Meantime, the rent check is bouncing and you can't pay the light bill.

I will NEVER go strictly with a credit card.

d
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The only thing that I have heard, and it's strictly anecdotal, is that if you purchase goods on the debit card you don't have the consumer protection you have with the credit card. Not sure about the liability issue either; what happens if someone filches your debit card and goes nuts?

If your card carries a Visa or Mastercard logo, you have the same protections as a credit card (i.e. $50 if reported in the first 48 hours of theft). These were extended to debit card voluntarily (i.e. not because the law forces them to do it). If you don't have one of those logos, you're up a creek.

Leviathan
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I now use my debit card more than my credit card, but I continue to use the credit card for things like mail order and online ordering, for the guarantee protection (even though my debit is a Visa, the protection is voluntary, and they could stop offering it any time they wished), and because if my credit card info is intercepted, it's only my credit card account that gets f***ed up, not my real money. (I don't let any waiter, etc. take my debit or credit card out of my sight).

Also, since you have a secured credit card, I assume that you have had major financial problems in the past. Hanging onto this card and using it regularly (and Foolishly) is a good way to rebuild yourself. How long have you had it? Find out their policy for dropping the security requirement (often one year), for increasing your credit limit, etc. The company I used in a similar situation did this without me asking.

Once you've had your card for awhile, you will start to get unsecured offers at high interest rates. Eventually, you will start to get offers for lower interest rates.

If you don't maintain a credit card - and plenty of folks don't - you almost have to "drop out" of mainstream American financial life. Again, plenty of folks get along just fine outside of it, but you should think about your own situation and make the decision for yourself.

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Okay I'll try to answer all the questions in the previous posts.

Yes, I will get the release of $500. and some spare interest to put into something that may earn more than 1.5%

I believe I had gotten the Secured card, because I wanted a lower interest cc rate, but could not show a job history long enough to satisfy my credit union. I did have other credit cards with higher interest rates, but I paid them off. This is the last major cc I have. (I also have a ROAD KING {monroe} 90 day same as cash card, but I use that only for car repairs, and pay it off in 90 days always.) OH and Kwik Fill card that just showed up in the mail that I thought I had closed along time ago. (gotta write them a letter and close that account this weekend.)

My thought was that for purchases, I could just use the cash I had set aside in my savings account. I don't think I've ever had a need for buyer protection. I don't generally buy much that I haven't picked up with my own two hands. I only occasionally buy things online. (usually Motley Fool books used from Amazon.com) (shhh!) <,^)

The other problem with having a separate credit card is that I'm not sure I would be able to resist using it. If I get used to not having one around for a while, I might learn not to use it. Also, if I pay off the secured card and close it, and then get the car loan paid off, I"m more likely to get some good offers in the mail. (except for Capital One, cause I told them to take me off their mailing list.)

The only real problem with my Credit report, that I've had in the past, was my debt ratio was always too high because of the payments on my student loans. (yes it's time to order another bevy of reports, and get them cleaned up again.)

The other alternative I had was to pay it off and give it to my BF to keep for me. (doesn't live with me) (yes he's trustworthy.) That way if I have an emergency, I can call him to come bail me out. (not literally, you know!) But that doesnt allow me the use of the $500 thats sitting in the bank earning barely 1.5% I also can't see myself freezing the card, cause if I did have an emergency, car died and stranded or something, then it would be sitting in my freezer and no one would have access to it.

You've all made some good points and I'll have to sleep on it some more. I won't have it paid off till the end of September anyway, so I've got some time to decide. But I think I'm leaning toward closing it down. After Christmas, I can think about getting another credit card. Maybe by then I will have trained myself to save to buy, instead of just buying. After all, I can always use layaway if it's something I really want, but am worried is not gonna be there when I get back. (okay..I shop at Walmart alot. It's close, its cheap, and they have just about everything I want. The rest I make.)

Anyway, thanks for the ideas.

Lady Ianna


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Well today is a perfect example of why I need to close this credit card. I went to pick up the tickets for the Motorcycle race that I got my bf for his birthday. On the way home I thought I would stop at Ames and buy a card. *STUPID STUPID STUPID!!* I ended up spending almost $100 on alot of stuff that I really didn't need, and I don't know why I bought. Yes some of it was 25% off, and the cards were 60% off but....

I didn't even buy the tent that I've been wanting to buy because I thought it would go down in price next week. I am so disgusted with myself right now. I was going to set aside the money that I made from selling my 'wreck' of a car, to fix my other car, cause I like it so much. (it has t-tops.) But now I guess I'm gonna punish myself and use the cash to pay off the credit card and either give it to my bf to keep for me, or cut it up and close the account.

I was completly shocked when the girl told me how much the bill was. If there weren't people in line behind me waiting patiently while she rang up every greeting card separatly (doh!) I would have told her to refund some of it. I was so sure it couldn't be that much that I stood there in the doorway, and read over every item. Sure enough, I'd blown it all. I suppose I should have tried to return some of it, but I figured I'd be safer just to get the hell out of the store before I found something else I wanted to buy.

My bf has recently been commenting that I spend to much time on the computer, but I'm gonna tell him that I'm much safer here, than with free time on my hands.

Anyway, please harrass me and make me feel bad, cause I need it. 8^(

Lady Ianna, doesn't get to wear her Fools hat today!!

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Bad, bad, Lady I! I've *never* gone into Target for one thing and blown a hundred bucks, and I'm sure no one else here, has, either.

Prepare for a stoning!

;-) No, seriously, how much of the stuff can you take back? Even at 60% off, if it wasn't something you were planning on buying, you can take it back (as long as it isn't a perishable, I guess). I would love to get to the phase where I never have to go back to Target and return, oh, for a completely hypothetical example, a set of silverware for $116 and some odd cents, because we had plenty of silverware, and no need for more, and certainly no need for like, 16 place settings, even if they were 20004.33% off or whatever. Or take a lovely, lovely, red suede reefer coat back to Bloomingdale's, because, darn it, I just can't afford it right now. No matter how dashing I looked in it.

Take the stuff back. Smile charmingly and forgive yourself and try not to do it again. That's what I do, anyway, and someday, I won't even be able to remember the last time the total in the checkout line left my jaw on the floor.


--Booa (who once went back to Kinko's three times, was that really $76 worth of copies? Yikes!)
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well I'm not taking stuff back. I don't know why. I guess it's to remind me how stupid I was? (or maybe I'm just rationalizing keeping it all.)

I went to the other local Ames today, on the way back from dropping off my bf present at his house. (long story, he called and said he wants to date someone else. doesn't want a relationship. I'm not getting into this whole mess again.he also said that I'm perfect and the best woman he's ever gone out with and he can't keep his hands off me, and couldnt come over to talk to me about it because he was afraid he'd change his mind. (THE DAMN FOOL IS IN LOVE WITH ME, BUT JUST DOESN'T WANT TO GET SERIOUS.) aaaaaaaaarrrrrrrrrrrrrrrrrrrggggggggghhhhh!) I'd already spent $80 on non-refundable tickets to the motorcycle race, so I figure I may as well give them to him, at least maybe he'll feel really shitty about it.

anyway, SO i stop by Ames on the way home, partially cause I dont wanna go home, and partially because I was going to look for the blanket that I was going to buy the first time I went into Ames. I did better this time though, I only came out with the blanket, a pair of sneakers, and a piece of purple vinyl fabric that I'm making into a "so...this is what you're giving up skirt and vest." Only spent $32.00 so I guess that's better, although I could have spent alot more had they had what I wanted. And I put it on my debit card instead. (spent my food money.) Oh well.

card is getting cut up. I've just decided.



Lady I is beyond hope.

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