Credit Cards

Investing Strategies Retirement Investing
#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
#56

I had a $1,000+ bill at my preferred auto shop and went to pay with my credit card. The clerk asked me if I could pay by check. I said I could but would need to stop by my house to get the checkbook and pay the next day. She checked with the owner and despite the fact that they knew me, the owner preferred the credit card today vs the check tomorrow.

#57

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. - sutton

Exactly. I have never had and never will have anything automatically deducted from my bank account or charged to my credit card. I think the ritual of receiving a bill and writing a check each month when a bill arrives helps me stay in touch with how much I am spending on various items. My GF on the other hand has everything automatically charged to her cc and really has no idea how much a particular bill is or if it’s correct She just pays the CC bill every month and doesn’t think about it.

Another advantage to writing checks, if there ever is a problem, I hold the cards in the sense I can withhold payment until the matter is resolved rather than trying to get a refund from a merchant who just reached in and took too much. An example, when I was building my barn, I needed electricity to run lights, air compressors, saws, etc so I had a temporary service that ran about $25 a month, mostly fixed charge and about $3 for usage. I paid that bill every month for a year or more with a check, One month just out of the blue, the bill arrived and it was over $700. It took over six months to straighten that out. Imagine if they drafted the $700+.

One final thing about having bills automatically charged to your CC, if you loose that card or the account is compromised, your CC company will quickly replace it with a new number. But then you have a lot of work to do to update your autopay with every last merchant you set up. And if you forget one, then there are late payment charges to deal with.

Keeping it simple, send me a bill, if it is correct, I will pay it.

1 Like
#58

Exactly. I have never had and never will have anything automatically deducted from my bank account or charged to my credit card

I have to totally disagree here. I automate everything. The key is to tune into the bills as they arrive, mostly by Email. I can’t ever remember any sort of error and I’ve been doing it this way for at least 20 years. Unless you live from paycheck to paycheck and are worried about your account not having enough money to automatically pay the bills (which, I’d guess, is half of America), I think it’s foolish to not automate bill payment.

Reminds me of, in the 1970s, when Social Security first started doing direct deposit. My grandmother (born 1907) refused to accept it that way. “I want that check IN MY HAND”. Then she’d line up at the bank on the 3rd of each month. Eventually they made her do direct deposit and she grudgingly admitted how much better it was to just “know it’s there”. I guess every generation has to percolate new financial technology before they become comfortable with it. Even my 86 year old mother now likes depositing checks by iPhone.

15 Likes
#59

I empathize with your grandmother.
When I graduated college and went to work I swore I would never use an ATM machine.
Couldn’t understand why anyone would…

#60

I think it’s foolish to

Wow.

-sutton

#61

My grandmother (born 1907) refused to accept it that way. “I want that check IN MY HAND”. Then she’d line up at the bank on the 3rd of each month. Eventually they made her do direct deposit and she grudgingly admitted how much better it was to just “know it’s there”.

Plus checks can get lost. They can get stolen. I don’t think the signature is analyzed, so they can be (easily) forged. (In fact, the “signing the back of the credit card” is stupid…Europe has the right idea: PINs; insert the card into the device, enter the PIN, done.)

I also automate almost everything. All of our monthly household bills are automatic, except the mortgage which I have to go in monthly and schedule the payment.

When you think about it, the idea of a check is really stupid. You accept a scrap of paper signed by someone as payment, and then hope it doesn’t bounce. At least cash has the backing of a government.

1poorguy

2 Likes