Cash , check or charge ?

toomuchglassSeptember 26, 2007

So many places now give you xxx amount of dollars to open up a credit card. I check to see if there's a fee - and if not - I open one. I never use the card again. Doing this has saved me money. How do you like to pay for things? Cash ,check or charge ? I keep cash on hand for stores that don't accept checks . I like to write checks - looking at the balance in Black & White makes me realize my funds are limited.( Plus we have free checking ) Charge ? --- last choice. We always pay off our monthly balance, anyway. How do you like to pay ?

**** On a side note ...... I can't imagine maxxing out a credit card (or two or more ) That's a hole you can never dig yourself out of. I know of a few people that live like that . Unreal.

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Have you checked your credit score latelY? Opening and closing CC accounts surely won't affect it positevely.

As far as my preferences, it is a charge, always has been. I never carried a balance and have no intention of. However, by charging everything (and I mean everything - gas, groceries, cable, phone, cell, pack og gum) not only do I have a complete account of where my money goes (and the protection for large purchases), but we get to fly for free on the account of getting "miles" for every dollar spent. We pay an annual fee of $59, but it is completely worth it since we average about 2 tickets a year - that's about $600-800.

I never have any cash and only use it for farmer's market. I use online bill payment so we average 2-3 checks a month.

    Bookmark   September 27, 2007 at 8:25AM
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I am exactly the same as yanalg.

Charge everything and pay it off every month so there are no interest charges. Then you get the reward points for free. However I don't pay an annual fee for my cards. Whether that is worth it or not probably depends on how much you spend in a month.

I rarely write cheques. Maybe one or two a year. All my bill payments are online.

I rarely use cash. I find that I spend more if I have cash on me, so I rarely carry it. Very few places only accept cash. I either avoid those places, or plan ahead of time and take out cash specifically for what I intend to buy (and no more).

I never use my debit card. If a place is set up for debit cards, it is almost always set up for credit cards. And now that some of the stores around me don't even require a signature for purchases under $25, credit card purchases are faster and easier than debit cards.

    Bookmark   September 27, 2007 at 8:51AM
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I use my debit card for stuff that gets used up...groceries, gas, restaurant meals. Everything else goes on the credit card that gives us cash back at Costco. I like the float, although I always pay off the balance in 30 days. I only carry American Express, Visa, and my debit Mastercard. The places that don't take AE get the Visa. I use only credit cards for internet buying...I'm told that's much safer. I write checks for fewer and fewer things. One restaurant we like locally only takes cash or checks, so about once a month I write one there. I started paying by automatic deduction and internet banking when stamps went to .41. I don't mind paying .41 to send a card or letter, but using a stamp every month to pay a bill seems wasteful when I can do it for free other ways. I like to put medical expenses on my credit card as by the time I get the bill, my reimbursement from my flexible spending account has come thru.

    Bookmark   September 27, 2007 at 11:53AM
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I'd be careful with how many credit cards you open - the others are right, it can imapct your credit score.

But, if you are making a larger purchase it can be a big help. (I opened the department store credit card to get 20% off my living room furniture, but I try to resist the offers at clothing shops to take 20% off of my $19.99 jeans from the sale rack)

    Bookmark   September 27, 2007 at 12:37PM
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I've only done this a couple of times. I opened a Pier One credit card once to get cash back and no interest x 6 months on a relatively large purchase (patio furniture). I paid it off just prior to the 6 months. After not using the card again for several years, Pier One closed my account and sent me a letter to that effect! Wonder if it looks worse to FICA if you close the account or if the merchant does?

I also opened a Sears account a year or so ago to buy a fridge. They had a deal with cash back $200/1 appliance, $400 for 2, etc. I "bought" 3 appliances, filled out the rebate info and sent it in, and the canceled the other 2 orders, so I got $600 back on my fridge. Also, for opening the account, I got free delivery. I kept waiting for Sears to ask for the $400 extra back for the canceled orders (and would've paid it back if they'd asked... it felt a little deceptive.) The salesman actually encouraged me to do it this way (it was his idea). I'll go back to him when I am ready to replace the oven!

    Bookmark   September 27, 2007 at 12:59PM
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My Citibank card acts like both a debit and credit card. I use it all the time. And I have internet online banking with them, so I pay all my bills electronocally and save 41 cents with every payment. When I was away for a month, I set up my account to pay all my bills while I was gone. I came back to find all my bills paid and my bank account pretty low. But it was good to now I had no late fees.

    Bookmark   September 27, 2007 at 1:39PM
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I use cash for almost everything day to day such as gas, groceries, and even eating out. I use my credit card for more spluge items that i may not budget in for that week. I prefer to keep a tight hold on my money. Also, i never pay for anything online. By doing that you have given permission to companys to excess your account. I have a friend who uses AOL and pays online and it automatically comes out of her checking account. One month they double charged her and it took a long time for them to return the extra money they took. I have heard other horror stories that are similiar so i choose to not give excess to my accounts.

    Bookmark   September 27, 2007 at 2:33PM
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If you us credit card for online purchases, especially from less-well-known providers, make sure that it's a card with a low credit limit ... and insist that the issuing company continue to keep it low, in case some rascals bill you for stuff you didn't buy, sell your credit card number, etc.

ole joyful

    Bookmark   September 27, 2007 at 5:13PM
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A recent survey by Dunn and Bradstreet said people using credit cards spend 12-18 percent more than people who use cash. Guess that's why all the fast-food places installed them, HUH? If that's true, one who follows a cash spending budget will more than likely already save... To heck with the so-called freebies and discounts. Opening and closing accounts will ding your credit score, as others pointed out.

I use cash for grocery budget ($50 per week) - a great way to curb spending in the grocery store and cause you to plan your purchases. A cash "allowance" for weekly shopping (anything other than groceries) - including gas and eating out (when necessary). Checks for bill paying, and a Visa debit card for the occasional items purchased on-line.


    Bookmark   September 27, 2007 at 8:06PM
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I don't see where they get those numbers unless they studied younger people, who make impulse buys or who don't worry about paying it off at the end of the month. I don't pay any interest or fees and I pay only for what I purchase. As far as I am concerned it is the only way to go.

    Bookmark   September 27, 2007 at 8:14PM
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I pay with cash for everything under $50 locally, my debit card (as a CC) for everything over $50 bought locally, with an actual CC for purchases on-line, and checks for all bills. It may be old school, but I like having a paper trail of checks for those living bills (mortgage, electric, etc...). And have actually had to use that paper trail once, so.... I'll keep going that way.

I would not use my debit card for anything whose price could change.... rental cars, etc... Or for anything online, just because it seems like sending the contents of my checking account into cyberspace.

I would really like to change my visa debit card for a MC one, but haven't looked into the possibility yet.... Those visa commercials where the world stops for the guy that uses cash just really tick me off.


    Bookmark   September 28, 2007 at 8:41AM
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I mostly use a credit card, but pay it off every month. I had a debit card, but someone got access to it somehow, and I had a fight to get all the charges removed. I was told the credit card has better protection- you only have 3 days to dispute a charge on the debit card. Luckily I spotted it. I rarely write checks anymore, and cash seems to go through my hands like water. If I have $20, I spend $20. If I have $200, I spend $200!

    Bookmark   September 28, 2007 at 10:08AM
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Flgargoyle,ain't it the truth! If I have a $20 bill, it becomes a $10, then a $5, almost before I know it! If I have cash, I spend cash.

    Bookmark   September 28, 2007 at 11:10AM
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I use a debit card for almost all day to day purchases. I have major recurring bills (Health club, cable TV, Cell and landline phone, etc) charged to a cc which I pay in full ech month. If I need to buy somethng, that I know I won't be able to pay in full, it goes on another cc and is paid in 2-3 months.

I don't know how I lived before on-line banking!

    Bookmark   October 1, 2007 at 1:21PM
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"A recent survey by Dunn and Bradstreet said people using credit cards spend 12-18 percent more than people who use cash. "

How many people??
Do you have a link to this study?

The numbers could actually be that 5% of CC users spend 12-18% more than cash users... then so what!

Personally, I KNOW that I spend LESS on my CC (knowing I have to pay it off) than cash (which goes through my fingers like water, too).

I use the CC as much as I can - for the rewards.
DH and I do not have debit cards... we see no reason to carry another card in our wallets.

    Bookmark   October 1, 2007 at 3:03PM
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For any ebay purchase I use PayPal, all gas goes onto one Discover card, other credit purchases onto another Discover Card, carry some cash for tipping and for various needs, but I like to put most things onto the cards. I pay off cards monthly online so I save about $30/yr just in postage and other misc to pay bills.

Whether someone uses a check or CC for groceries makes no difference IMO. If you have to use cash, it MIGHT make a difference, but then again that's not absolute either unless you have no extra cash with you. Paying cash does NOT mean people will budget.

I do carry a list when I go to the store and avoid impulse purchases, but some are OK. If I see a sale on something I know I need, it's an "impulse" purchase but not a bad one.

I would never charge a pack of gum and if I were a store I'd tell someone who wanted to charge a pack of gum to take a flying leap. At my store we made a $5 minimum charge purchase. Not messing with taking the hit for anything less.

Not knowing more on the study mentioned I can't really comment. But I will say that people who can't get CCs usually HAVE to spend less! The people with the cards might be able to afford to spend more. So without knowing more and with knowing how many of these "surveys" are massaged and poorly worded, I'm skeptical of it's value.

Oh and for the question on whether it's better to close a card yourself or have the vendor close it, it's MUCH worse if the vendor closes it. Think about it the way the credit people would, why would they close it???? Bad risk.

One of my rules is that I will not pay for having a credit card. I figured I'd pay a higher interest rate rather than pay an annual fee. That's fair. To me the only thing dumber than paying for a credit card is to pay for walking into a store to be asked for money, ala Sam's, Costco, etc. Won't do it. There's plenty of places to spend my money that won't surcharge me and then require me to check out twice when leaving the store. (There's my rant for the day)

    Bookmark   October 9, 2007 at 5:06AM
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I may have missed it, but I didn't notice anyone mentioning the cost to the seller of using credit cards. I have compassion for small businesses trying to compete in today's markets, particularly small grocer types who have a lot of wastage, and thus I try to limit my credit card purchases to amounts over $10. Yes, I could get rewards & float, etc., but it isn't worth it to me to cause them to lose money when I buy a $1 pack of gum or a couple of apples.

    Bookmark   October 9, 2007 at 1:36PM
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Isn't the fee businesses pay a percentage of the total? Why would it matter how much the purchase is?

Folks above make some really good statements. I know I spend more money when I use cash, and most importantly, after its gone, I have no idea or recollection where it went and always freak out that i lost it somehow. With the credit card, I know precisely where the money went, and I like end of the year summaries indicating what i spent on entertainment, gas, etc.

As far as paying an annual fee to the credit card, it is so worth it 9at least to us). No fee credit card rewards programs are so much worse than those based on a fee. I need to spend about 40% less to get an unrestricted free airline ticket (and we average about 2 annually) that with another reward card. Average ticket price = $400. 40% of two tickets a year is $320, and it costs me $59. Net gain = $261.

Ditto for BJ's. Fee is about $48 9including taxes). I shave off $20 in coupons they offer on-line around the holidays ($10 off $100, or $5 off $50). On many items they offer unbeatable prices, and they have their own coupons and accept manufacturer's coupons. Hormone-free chicken breasts (skinless and boneless) go for $2.89/lb, regular supermarket charges $4.99/lb. Bison meat (ground) costs $7.49/2 lbs, supermarket is $4.99/lb. These are just minor examples, but these items never go on sale elsewhere.

Brand new books are sold in BJ's at %43 off. Most available Border's coupons are 30% at best, more often at %20. Considering the amount of books we get, I make up the cost of BJ's membership just on the books easy. I do not mind paying for the membership there, it really is a good deal if you shop smart. But if you only buy items in bulk at warehouse type places that can be purchased in supermarkets at B1G1 sales, then paying BJ's annual fee is not for you.

    Bookmark   October 9, 2007 at 9:00PM
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Charge for everything possible. Just cashed in the miles for 5 first class seats over Christmas break. Definitely worth it for the small fee. It also makes our books easy to track. I don't have to save as many receipts.

I was taking money for PTA membership this fall. Checks-fine. But pull out a 100 dollar bill and expect me to have change? Get a checking account. I'm not your personal banking service. I find it really irritating if people don't have their own exact change.


    Bookmark   October 11, 2007 at 4:43PM
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I have been thinking about changing from my Visa to a card that gives money back. I know discover does, but don't know if there is a yearly or monthly fee. Are there other cards that give cash back. I pay for my travels on a CC and I could earn some points that way.

    Bookmark   October 13, 2007 at 1:26AM
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"I know discover does, but don't know if there is a yearly or monthly fee."

No fee of any kind....

    Bookmark   October 13, 2007 at 3:26PM
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Brushworks Spectacular Finishes

Excessive use of cards, whether you pay them off, or carry the balance increases the cost of goods you're buying.

Merchants can't stay in business if they don't pass along the 3 to 4% fee. You are paying more for the convenience, and you should.

Our state charges the fee back to us if we use a credit card on any transaction.


    Bookmark   October 20, 2007 at 8:38AM
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"Excessive use of cards, whether you pay them off, or carry the balance increases the cost of goods you're buying."

Not necessarily true. There is a fee and as a tidbit of info, if you cannot scan the card, rather use the punch in numbers the store gets charged an extra fee of an additional 1%-3%.

Merchants can't stay in business if they don't make a profit. There's far more fees involved than simply the CC charge.

On the surface you would think this is a direct loss for the store, however sometimes an investment can pay off in the long run. How? Far less accounting costs for one. You have your charges totalled for you daily. Don't have to have someone being paid to count the cash, run multiple tapes on checks, drive to the bank however many times per day and of course the biggest benefit to the store is no risk of bounced checks or bounced check fees. Granted, there is a risk of a chargeback, but if the store is reputable, that risk is low. Also, even with cash there's a lot of counterfeit out there too so there's potential losses.

So when you look at all the facts, it's not necessarily more expensive to the store.

And yes, normally it's a percentage, however some clearing houses charge a surcharge for smaller amounts. For me, it was a principle thing - if you're buying something at a computer store, you should be spending more than $5!! LOL And keep in mind that if there's a return, the vendor gets an additional penalty for the transfer. Smaller purchases in my business were more likely to be returned. Of course this shouldn't apply to a pack of gum, but I do know certain customers....

    Bookmark   October 23, 2007 at 3:56AM
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I pay for most of my purchases using cash. Believe me, it does not dribble like sand through my fingers - ask my kids. I do have some problem remembering where some of the purchases were made, but get receipts for most purchases.

I'm inclined to believe the claim that has often been made that when currency doesn't leave one's hands, for many users of credit cards, there is a tendency to buy more things.

As for the store's cost of doing business, the store charges the same for the goods, whether paid by cash or card - there isn't a surcharge to use a card, as there should be. Though some of you make some good points about less accounting, fraud or fees to Brinks (though they need to make a number of visits, in any case).

I've sometimes asked clerks at stores whether they'd rather be paid from the proceeds of the credit card purchaser's purchase or mine, and most say that they don't think that it matters. I say that if the store pays their wage from my purchase, they can get cash in hand tonight - and a full $1.00 for each $1.00 owed.

But if they were paid when the store gets the money from the credit card purchase, they wouldn't get paid for about 6 weeks ... and for every $100. that the store owed them, they'd get about $98.00 (maybe less). Most had never thought about that.

My computer is sort of old, and I suspect that I may have a virus, possibly a trojan horse - I was notified a while ago that something had arrived that the virus cleaner couldn't handle.

I don't keep friends' email addresses on my hard drive. That gives me an idea - maybe I should collect the purported addresses of the guys who send me all of that scam crap on my hard drive, so that the thieves who may harvest stuff from my computer might get theirs and send them a lot of junk. But I've found that a number of the addresses that the email scammers give are fake.

Sometimes when they include a number of other addressees, I send a "Reply to Everyone" making fun of their claim, especially the ones offering male enhancement ... or other pharm stuff ... or porn ... and asking whether, if a smiling salesperson at my door gave me a false name or fake address, what possibility do they think there might be that I'd ever consider doing business with that person?

And I don't use my computer for credit card payments or banking.

Howver, I don't need to pay 53 cents or so postage to send checks to pay for most of my utility bills, credit card, etc. - the bank does that for me. Were I not a senior, I guess that I'd have to pay them a fee per payment.

Maybe then I'd get an updated computer and use it as many of you do - son has been lobbying that I should.

I won't pay an annual fee to carry a credit card. Actually, I don't have one that offers rewards, either - I think that they are less common in Canada, but some Canadians may disagree.

I've considered getting one that gives a rebate to my university, or a charity, such as Amnesty (their newsletter arrivng this morning suggested that). But not towArd a new Chevy - that'd be useless to me, as I have no plans to buy a new car.

I'm not about to pay Costly or Scam's Club for the privilege of walking into their store, either - about a buck a week, even if I only enter once a month ... or three.

Buying gas of a certain brand allows me a (small) reduction in my renewal fee for CAA next year and I often buy at that station, price being the same ... but don't use credit card.

I haven't signed up for loyalty cards at various stores, either. I note that, with A & P at least, often when they put the "Air Miles" logo, with statement of the number of miles acquired, on a product ... they don't mention the price of that item ... which often is no bargain.

Rant concluded, I guess.

I hope that your week has brought a couple of memorable if unexpected benefits, blessings or pleasures.

ole joyful

    Bookmark   October 24, 2007 at 9:52PM
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Guess I missed this one before:
"Isn't the fee businesses pay a percentage of the total? Why would it matter how much the purchase is?"

One of the fees is a percentage of the total. However there are a number of fees. There's also a transaction fee of anywhere from about 30 to $1 per transaction, plus the monthly fee to allow the "privilege" of accepting cards in the first place, plus the account maintenance fees, sometimes there's a cost to transfer from the CC account to the local bank account, and so on and so on. Lots of little fees that sure do add up.

That's why it does matter, in many cases, how much the purchase is. I'm seeing more and more minimum charge amounts for stores operating on tighter margins and understandably so. The fast food joints and the like have far larger margins so it doesn't impact them as much and one of the reasons they're going more and more toward credit cards.

People don't understand the scams of the credit card issuers. If they were treated the way the companies treated the small businesses especially, there'd be such an uproar, congressional investigations, picketing and who knows what else! I have a special affection for the small businesses. They're truly the backbone of this country and what built this country. The small town merchants, the "mercantile" the blacksmith, the country doctor, etc. They gave people the chance to get ahead and to this day contribute so much to the local communities. Who do the schools go to for contributions first? The local small businesses. Who does NOT get TIF financing and other tax breaks from the cities? The local small businesses. But who still provides jobs, economic development and the like? You got it. So end of my rant-du-jour, with the suggestion to support your local businesses. When you have one, or lose some, you start to realize their value.

Happy days all!

    Bookmark   November 9, 2007 at 4:48AM
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I charge most things but we normally pay off the card every month. This benefits us because we get points and we have already taken a couple of trips with our points.

Re: merchant credit card fees, in addition to what has been said, if you add a tip on to the card,In CA, guess who has to pay the transaction fees on the tip? So the merchant actually loses money here.

Also, in the case of gift card purchases, the merchant doesnt make money on this. they make money when the gift card is redeemed. Bear in mind that the gift card may be redeemed at other locations other than the place it was purchased So, if you purchase a gift card with a credit card, the merchant takes a loss on this too.

    Bookmark   November 10, 2007 at 12:02AM
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It never occurred to me about the cut by putting a tip on the card. DUH! I guess usually I pay the tip with cash though. So for places I like, I'll keep that in mind.

I'm wondering about the gift card thing, though. Don't think I agree with you on that. What happens if the card is never redeemed? Actually, the entire card is profit (less the actual cost of making the card) when it's purchased and the losses would come only when redeemed, in whole or in part, wouldn't it? Plus they'd keep the money on the tax that they would not have to pay on the purchase so that's added profit to the store. Not unlike when we prepay our phone bills (which amazes me that they allow that requirement, but I digress) or paying a retainer to an attorney or something.

    Bookmark   November 12, 2007 at 6:20AM
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cynic: Im familiar with how the gift cards work in a franchise situation. I take gift cards at my place of business and a lot of times I sell more than I redeem. When I sell a gift card, I get money from the customer for the face value, then I get "charged" by the bank for the same amount. it's an even exchange.

When someone spends the gift card at my store, I get a credit to my account, minus any fees. redemption is my profit center.

Unredeemed gift cards may be a profit center for the corporation as the unused funds are in an bank account making interest, but it does not profit a merchant at the store level.

You can buy a mcdonald's gift card at one location, but spend it at any of the 1'000s of other locations. If the card was profit at the time it was sold, it would not make sense for independent franchisees to redeem them or they would be giving free stuff away.

Also there are transactions fees for gift cards which may be higher than credit cards. Some gift cards have flat fees not a %. Example..buying a Starbucks coffee is $3 but the redemption charge may be $0.35 (just an example)

Some people will use up multiple remaining gift cards to pay for a purchase. For example, the bill is $3.99 and they use up the first gift card for $3.69. if there's 0.30 left, they will whip out their 2nd card to pay for it. If the transaction fee is 0.30. This is a total cost of $0.60/3.99, over 25%

If you buy a card at the supermarket, the supermarket needs to make some money too. The transaction fees are higher for 3rd party gift cards.

This hurts when the ticket items purchased are only a few bucks.

    Bookmark   November 13, 2007 at 10:25AM
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