Credit Cards

Investing Strategies Retirement Investing
#36

I very rarely use checks now. The landscaper is all I can think of at the moment. Everything else is credit card, or occasionally credit union debit (not the card, a direct debit by a utility, for example). I write maybe a dozen checks per year, now.

I still use checks for specific things. For example, the local quilt shop requests cash or checks because they hit by large fees for credit card use. To incent folks to use cash or check, they give you a raffle entry with each purchase using those from which they draw a name monthly for a $25 gift certificate to their store. It’s more cost effective for them to do that than pay the credit card fees. I want them to stay in business, so I write a check when I go there.

I also have POA on DS’s bank accounts, and from time to time, he needs me to move money from the credit union to his bank account. Although I can do that electronically, the bank takes 3 business days to credit his account so it is actually faster for me to write a check and use the mobile deposit on my phone to get the money in the account the next day. I really, really want him to get rid of that bank and make the credit union his primary financial institution, but for whatever reason, he likes it as it is.

I find that checks do still have their place, and like credit cards, are just another tool in the financial toolbox.

#37

I have seen some places starting to charge an extra 4% (give or take) for use of credit cards. Usually smaller shops/businesses. They seem to prefer cash. (And they don’t even sell buggy whips! :wink:

1pg

#38

Daughter has used zee-something, I believe. She borrowed money from her mom, and paid it back that way. I gather it is similar to VenMo.

Yes, Zelle was my first choice but my credit union has incompatibility issues so I wound up using Venmo.

IP

#39

All the CC companies are congratulating me on the $XXX of cashback & bonuses we’ve earner from them this year. SMH. You have to wonder where this money comes from, because they sure aren’t getting it from me.

Radio host Dave Ramsey has built a $100 million plus empire railing against credit cards. He’s very popular among folks who want a “work requirement” for the child tax credit. I thought child labor was illegal.

https://www.theguardian.com/money/2020/oct/29/dave-ramsey-de…

intercst

1 Like
#40

Radio host Dave Ramsey has built a $100 million plus empire railing against credit cards.

I’m not a fan of DR because I don’t think his investment advice is good. But for a large proportion of the population, getting rid of credit cards and debt is super excellent advice. To be among the minority of Americans who accumulate wealth to, say, generate at 4% SWR at age 65, you have to start somewhere. His religious zeal against debt is exactly what many need to start. Debt abuse is similar to substance abuse. For many, not doing any of it is the only way they don’t get addicted.

As an aside regarding his religious zeal, I don’t like that he mixes religion with personal finance and think a low-cost index fund approach to investing would serve his audience better. But I guess the religious zeal for the “no debt” portion has done a lot of good for a lot of people.

7 Likes
#41

You have to wonder where this money comes from, because they sure aren’t getting it from me.


They charge the retailer around 4% for each credit card transaction.
#42

They charge the retailer around 4% for each credit card transaction.

My MIL had a gift shop in Omaha’s Old Market. She had to raise her prices 6% to cover the fees that she incurred to accept credit card purchases. That was in the seventies and eighties.

Before I retired several restaurants that were in my colleagues lunch rotation offered 5% discounts when you paid cash. California has laws against charging a fee to use a credit card for a purchase.

It makes sense to use a credit card at businesses that accept them as the prices of goods or services have been increased to cover their credit card costs. Just remember to pay your credit card bill in full at the end of the billing period to avoid paying interest on credit card fees.

1 Like
#43

Not many people realize, but there’s actually an easy way to use Venmo to pay at the register with a QR code. On the main screen of the app, if you tap the Scan button, then the “Show to Pay” tab, it generates that code that a merchant can scan. The only reason I know this is because Venmo ran a promotion in partnership with the Giant Eagle grocery chain last year, where EVERY time that you paid a $40+ transaction with Venmo, you earned a $10 credit in your Venmo account. And the best part - it was not a one time offer - it was EVERY. SINGLE. TIME. (Limited to one transaction per day.) I ended up racking up about $400 over a period of 3 months.

The interesting thing is that many times, the cashier would tell me that very few people were aware of the promotion. One told me that over the prior 6 months, I was only the second person that used Venmo at his register. This is despite the fact that flyers were posted all around the store advertising the deal!

I find it strange that the majority of people either don’t pay attention, or think that these apps are too much of a pain to learn to use. I was talking to a friend one day about credit card cash back and she said that she “thought maybe” she had a credit card with some sort of rebate, but it was all too confusing to check. Ugh. Like a previous poster said - it’s free money.

Cathy

4 Likes
#44

Credit card companies have always charged vendors 5% for guaranteed payment. Some cards give 2% back to users like us to encourage card use.

I, like you, give small business owners cash because I know this. My hairdresser and family owned restaurants. I figure chains build it into the price. My local body shop gives a 3% discount for cash (rather than saying it’s more for cards) but again they’re a small local business and I get it.

#45

Someone told me Dave Ramsey recommends high fee front loaded funds so I never listened to him.

#46

I hate grocery apps. Hate 'em. But you have to “clip” their coupons (if you can find the one you want!) to get the sales. Very annoying.

I have my credit union app. The ONLY thing I use that for is remote deposit. I really don’t like having that on my phone at all, but there’s not a branch nearby. I think “mobile banking” is inherently insecure. At least with my browser at home, I have encryption, and a non-routable IP address internally. Plus I usually use a VPN.

Someone could still tap my hard-line, but it would seem easier to intercept a radio transmission (which is how a smartphone works).

1poorguy

#47

I have my credit union app. The ONLY thing I use that for is remote deposit. I really don’t like having that on my phone at all, but there’s not a branch nearby. I think “mobile banking” is inherently insecure. At least with my browser at home, I have encryption, and a non-routable IP address internally. Plus I usually use a VPN.

My credit unions are 3 states away. A 2 day drive. Easy way to do it is to deposit the check at a local brick-and-mortar bank and then ACH transfer the money to your faraway bank/CU.

On the phone, just disable mobile data so that the bank’s app goes through your home network. You can set up a VPN on your phone. Then you’ll have the same security as your desktop computer has.

6 Likes
#48

I very rarely use checks now. The landscaper is all I can think of at the moment. Everything else is credit card, or occasionally credit union debit (not the card, a direct debit by a utility, for example). I write maybe a dozen checks per year, now. Bought a box of checks maybe 10 years ago, and still haven’t used it up. Like you say, old school. And checks have issues (e.g. forgery, bouncing, etc).

I can’t remember the last time I manually wrote out a check. For merchants/ vendors that don’t accept credit cards, the CU will physically cut a check and mail it for free. Increasingly, big clients have gone to ACH payments so I seldom receive checks anymore either. Makes going to the mailbox less fun.

1 Like
#49

I have my credit union app. The ONLY thing I use that for is remote deposit. I really don’t like having that on my phone at all, but there’s not a branch nearby. I think “mobile banking” is inherently insecure. At least with my browser at home, I have encryption, and a non-routable IP address internally. Plus I usually use a VPN.

Being able to deposit a check without going to the bank is wonderful. It is a great boon to old folks who have trouble getting out to the bank. In my case it saves me trying to remember to deposit the check, as it is in my account within ten or fifteen minutes of opening the mail.

Most of my browsing uses https, where s is for secure, which means it is encrypted. I assume that my bank’s app and my broker’s app are also. Not as secure as using a VPN, but not wide open either. (Note that you can use a VPN, or at least most of them, with a phone.)

https://en.wikipedia.org/wiki/HTTPS

3 Likes
#50

I can’t remember the last time I manually wrote out a check.

I still write them when it’s a little guy and the 3% credit card skim will hurt him. Our irrigation guy, landscape guy, cleaning ladies, etc. Typically they like to be paid right then and there, so a check is the answer seeing that we rarely have a lot of cash around.

Between Kroger fuel points, Amazon reward points and our cash back cards, I’d guess we “get back” around $2000 a year, and I know it isn’t really “get back” because you have to spend it, but then the people who are spending cash and eschewing cards aren’t getting anything except the same products that I’m buying, plus I get extra.

Yes, research from the credit card companies shows that people spend more when they have a credit card instead of paying with cash and I’m sure it works that way for a lot of people. It’s unclear to me that it’s quite that simple of cause/effect because it didn’t work that way for me (while paying for Amazon Prime surely did; as soon as delivery was “free” (ha ha) my spending with them went up dramatically.)

There are a lot of pretenders out there trying to muscle into the game: Apple Pay, PayPal, Venmo, etc. but the plastic fantastic is accepted universally and just works. All you have to do is pay it off once each month; what a convenience, and money to boot!

5 Likes
#51

Some of both. Looks like I write about 150 checks/year, or about 12-14/mo.

A few are for the reasons Goofy et.al. mention: the little guy needs the 3% more than I need the cash back.

But another big part is restricting the digital pipelines into my account. I’m not authorizing my dodgy high-deductible health plan to go in and pull the premium every month, nor my home/auto/car insurer. The amounts change, the coverage changes, and I see errors somehow never being in my favor.

My bias is that with paper checks – sent US mail in a mostly-empty steel box at the post office or grocery store – has a virtually 100% chance of arriving and being credited appropriately. Then, the utility transmits the copy to my bank, who then credits them and debits me. At no time was the payee directly accessing my account, and certainly couldn’t do so on a recurring basis based on a single check.

A vaguer concern is cybersecurity/cyberterrorism. I might be wrong, but it seems to me a web of no more than five lines into my checking account (two money markets, three credit cards, with Venmo authorized for deposits only) with the two money markets in separate, unlinked silos is intrinsically more secure than a network of four utilities, three insurers, three credit cards and four or five others (pharmacy! property taxes! propane! internet!) all having authorized access, pretty much whenever they feel like it.

Is this absolute? No: consistency is the hobgoblin of little minds. Much easier to split the monthly Visa on Quicken and send a one-time-only ACH four-five days before it’s due. Yes, there have been no interest charges for years.

I’m with Goofy: I don’t see a need for anything but cash, check, and Visa/MC/Amex. (Although my children did beat me into Venmo so we could settle up small items e.g. joint trips to Costco)

Perhaps unrelated, but: a few years ago, my wife and I went down to a TBTF bank to set up her mother’s estate account. The nice lady at the unnamed bank (we will refer to it as One That Opened A Bunch Of Unauthorized Customer Accounts A Few Years Back, or OTOBUCA for short) said, partway through the process: do you have any other accounts with us you want to link?

No

*But, I see you have a line of credit…*it took a minute, then realized OTOBUCA was also the Mother Bank for the Visa I buy groceries with.

I think: Sure, link my MILs hopelessly snarled and possibly insolvent estate with my personal mid-five-figure credit line! Why not? What’s the worst thing that could happen?

I said, NO. DO NOT DO THAT

Next month, the statement shows up…guess what? Yup.

Paper checks, independent silos as much as possible.

Plus, I’m old

–sutton

1 Like
#52

But another big part is restricting the digital pipelines into my account. I’m not authorizing my dodgy high-deductible health plan to go in and pull the premium every month, nor my home/auto/car insurer. The amounts change, the coverage changes, and I see errors somehow never being in my favor.

You can still pay electronically without authorizing automatic withdrawals. Just make a one time payment when you get the bill.

3 Likes
#53

Hi RHinCT,

https is what I use for all websites. I also use many bank specific apps on my iPhone. Fidelity, Ally Bank, and HM Bradley Bank and use their mobile deposit and funds transfer options frequently.

I understand VPN in concept, but have never loaded up a VPN app on my Mac or my iPhone. I’ve always worried that some app might be messing with my IP address and will someday render me unavailable…

Could that happen if running VPN???

Thanks,
'38Packard

#54

I write about 150 checks/year, or about 12-14/mo.

A few are for the reasons Goofy et.al. mention: the little guy needs the 3% more than I need the cash back.

That’s what bill pay is for at our credit union. They write the check and put a stamp on it to go to whomever it’s going to.

…sent US mail in a mostly-empty steel box at the post office or grocery store – has a virtually 100% chance of arriving and being credited appropriately

Wow. Is your experience ever different than mine. I am lucky if my bills get delivered by mail, and unfortunately failure to receive does not excuse you from failure to pay on time. I luckily remembered we had yet to receive our property tax and went on line to see what we owed 2 days prior to penalty phase.

A vaguer concern is cybersecurity/cyberterrorism…

Happily we have a kid who is a cyber security professional and a freeze on our credit given Equifax already gave our information over to the Dark Web. Our credit freeze terminates multiple attempts at incursions into our credit per month. It’s pretty much never ending to the point where we wonder if our recent 24 hour opening of our credit for a mortgage broker will result in more accounts being set up in our name.

If you think you are safe, you are not. It’s a pipe dream.

Every account we have has two factor authentication at a minimum.

FWIW,

IP

#55

If you think you are safe, you are not. It’s a pipe dream.

No argument - never claimed to be ‘safe’

The whole concept is not to be the easiest house on the block to rob nor the easiest pocket to be picked. So, yes, the cell and laptop are both VPN, the dark web is prowled for our demographics, everything that counts is TFA, passwords aren’t repeated nor stupid*, and the three credit bureaus have had a lock on them for years.

*there are degrees. My NYT, TMF passwords are a lot less strong than, say, banking/brokerage access.

But I would never claim to be safe, handsome, athletic nor immortal. The gods laugh enough as it is.

–sutton
who notes that 23 trackers emanating from this site are at this moment being blocked. By comparison:
NYT: 15.
Johns Hopkins Covid Tracker: 2
PurpleAir (crowdsource air quality): one
Wikipedia: zero

2 Likes