I use a credit card whenever possible and pay off at the end of the month. Hubby and I have a budget and track all expenditures as we make them, so the payment method isn’t relevant. We also have a small amount of “fun money” that we keep in cash and can spend on whatever. The total is in the budget, but each purchase out of it is not. Typically, that’s the only cash either of us carries.

Anyhow, at least if I use my debit card, I can track my spending and figure out what I’m wasting money on. I’ve tried in the past, but come to the conclusion that I never will track cash spending consistently. I’m just too lazy for any system that requires a lot of effort on my part! :)

Question 6: To what type of consumer would you recommend debit cards over cash?

My comments: Visa is clearly focusing on the benefits of debit cards over cash, but the true showdown for those who use plastic is between debit cards and credit cards. The set of above reasons for choosing debit cards is a subset of the reasons for choosing credit cards over cash—and credit cards offer more protection, tougher security, broader acceptance, and more attractive rewards

I have had similar experiences trying to get the cash-advance limit on my credit cards removed. One credit card company told me all I could do was tear up the letter containing my PIN when it arrived in the mail. They claimed there was simply no way in their computer system to remove or lower the cash advance limit.

It is good that one can dispute charges when using credit cards, and one can use the bank’s money for a month or so before paying in full. However, I had a couple of problems with online purchases with a debit card – like I ordered an item, never got it, and the website disappeared in the meantime. The bank refunded my money in that instance, and when I had a dispute with an internet service provider.

My method of operation now is never to use credit. Twice in the past couple of months, when I’ve gone to the bank, I’ve been offered to apply for a credit card by the teller. I have no interest whatsoever in obtaining credit cards or “owning” debt.

Every cent spent by this household is logged with a DayTimer system and in the associated checkbook register – pen and ink! One thing I’ve gotten bad about is reconciling accounts the way I used to do when I received paper statements. I got tired of the statements piling up, because I kept them for years, and signed up for online statements. But when I received them, I tended to the matter before sticking the envelope in a drawer. Now I am very lazy about doing it online. I sometimes delay for a couple of months.

Because I budget a certain amount each month for credit-card spending and don’t exceed that, in effect the credit card is doing the same thing — psychologically. Running a tab (on purpose) might be a different experience.

For me the problem with a debit card is that if it gets stolen a thief could, in theory, drain your bank account before you have a clue what’s going on. The first you’d know would be when your regular bills started to bounce, damaging your credit and inflicting late fees and ISF fees. Though you might be able to undo all that, it would entail a great deal of hassle and headache. With a credit card, you have the opportunity to review all the debits before you pay the bill.

Anyhow, I now use a credit card ONLY for online purchases where I am most vulnerable to identity theft.

As a result, I like having all of my purchases “separated” onto another credit card. That way, if a bad guy gets a hold of my credit card numbers, worst thing they can do is charge a bunch of stuff that can be easily removed before my next bill.