I have seen no less than six articles today extolling the virtues of using your credit card for purchases or warning against the treacherous waters of debit cards…. ?
Apparently since you actually have to have cash in your bank account to cover your debit charges (and someone might steal your card) your debit card is risky. Now, your debit card can kill you – your bank can charge whatever they like, literally, if you overdraw your account. If they want to charge you $100 for going over on a $3.75 coffee house debit transaction they can legally do it. So you absolutely have to know what you are spending and what anyone else with access to your account is also spending, but as long as you don’t overdraw your debit card isn’t innately more risky to shop with.
Mary Pilon at the Wall Street Journal advises us: “You’ve figured out your holiday gift list. The next question: paper or plastic? Generally, plastic has the edge.” Is she mad? Why does she recommend a “Charge it” Christmas? She claims that CCs offer an additional paper trail in case you need to make a return, added warranties, repair or even installation services, that it is easier to return something purchased on plastic, that you get an added discount for opening a new store credit account, or even credit-reporting services. She then switches to talking about the various gift-card and layaway and talking about various alternatives to the mall.
When I worked retail I NEVER saw someone bring in a credit card statement for a receipt…. never. A credit card statement is not a store receipt, if you find a really nice salesperson they might be willing to help you out and look up your transaction – but most stores have clamped down on their return policies. Do not count on your CC statement being honored as a receipt. Most CC statements to NOT itemize the purchase, they only show the store and the amount charged, so your CC statement does NOT show that you purchased a particular item at that store, only that you purchased something there. All that together and I have never had any problem returning something paid for with cash. There is no store that I know of that will give you anymore hassle for a return with receipt for an item bought with cash than one paid for with a CC.
Now I know that Visa and Master Card offer extended warranties on items that have warranties as long as you register the product and jump through any hoops the manufacture has for you, but does this advantage actually offset the risk of using the credit card? I have never had a card that covered installation for anything either.
Keep in mind that credit cards aren’t in the business to lose money. If you want to look at your credit report you have one free-report per year and a free report whenever you are deigned credit and if you want better tracking there are better options than signing up for a credit card to get credit monitoring. If you are getting 20% off on a purchase for opening a credit account then you can be sure that this card is not going to be your friend.
New regulations are also making gift cards more problematic than they have ever been.
Now I am just cynical enough to think that the CC companies are absolutely panicking this holiday season. Expected low sales coupled with customer dissatisfaction (and in many cases outright rage) over their recent “bend over and take it hard” changes to their customer’s credit card agreements make this holiday season look a little less jolly to the CC companies. I am sure they would LOVE to scare everyone away from a cash only Christmas where people use only cash or debit cards for their purchase.
