Last Monday morning I went out to run some errands — nothing fancy, just dropping off a document at the tax guy, paying for the sooper-seekrit mailbox, and a quick trip to Kroger for some top-up items. Basically my spend was less than a hundred dollars, but I knew I had way more than that in the bank account, so no big deal, right?
Wrong. I got home, check the email and there was a warning message from the bank saying I had less than $100 in my account (I am so glad I have this feature). When I looked at the account, there was an ATM charge from some company for $336 dollars — a company I’d never heard of nor visited, and when I looked at the details, it noted that the transaction method was a “tap”.
Didn’t happen.
I then called the bank and told them about the fraudulent claim, which got the wheels turning. Net result: they changed the transaction to “pending”, but then the crap began: policy is to issue a new card number/card, which takes ta-da! up to five business days to process and deliver. So basically, I end up without an ATM card for that period, plus I have to contact all the autopay vendors and give them the new card number so that my life can continue uninterrupted, without such things as wifi being disconnected and so on — you know the deal.
What disturbs me about all this is that apparently there’s no guarantee that a fraudulent transaction can be “clawed back” if it’s been made against a checking account — it’s considered your problem — but with a credit card, however, it’s the bank’s problem and they have all sorts of ways to get the money back. Seems weird, but that’s banks for you.
I remember seeing one of those EeewwwChoob videos a while ago wherein some smart money guy said that he refused to use an ATM card, ever, and only used a credit card because of just such a situation.
Here’s my take: I don’t owe a lot of money on my credit card, and thanks to an upcoming tax refund I could pay it all off without any problem. (I normally pay 6x the “minimum” each month, so I don’t get stung too badly by their loanshark interest rates.)
I am thinking, now, that maybe I should do what the Smart Money Guy said, do away with the ATM card and treat the paid-off credit card like it’s an ATM card, and just pay the balance in full each month. (I don’t spend a lot of money on the Visa card so this shouldn’t be a problem, and our income — from New Wife’s job and my SocSec gets automatically transferred out of our current accounts into an interest-bearing account anyway, so we never have that much cash in the current accounts.) I have full faith in my and New Wife’s self-discipline to do this, by the way, so on that score there should be no problem.
My question for y’all: if I do the above and pay off the credit card balance in full each month, is there a risk that Global MegaBank Inc. will realize that they’re making no money off their loansharking, only from their transaction fees, and cancel my credit card?
All input is welcome.
No real danger of cancellation. They are like Satan. They just keep tempting.
If you are worried about it, you can just pay the fees for Amex. That’s thier system, pay it off every month.
My wife and I have been doing it for 40 years. Never been cancelled. The credit card companies still make their cut of each transaction so they don’t really complain.
Like fisheriiijs above, we’ve been doing this for years. Never a problem plus we rotate between two cards (Amazon and capital one) to get benefits. The cap-one card ends up costing us $100/year, but the travel benefits outweigh the cost for us. YMMV.
You won’t be cancelled. This is SOP for our family and has paid dividends over the 40+ years we’ve held to this policy.
Yes that is a problem with using an ATM card. There are no safeguards for withdrawals by use of an ATM card.
Credit cards have a much better set of safeguards concerning fraudulent charges. What I would recommend is obtaining two credit cards, each one issued by a different bank. That way if a credit card number gets hacked you have a backup credit card that can be used so that the disruption to the to your life is minimal while you’re getting a replacement card for the for the hacked one.
Fo even more fun do this, I rotate use of the credit cards on a monthly basis so that as far as the banks are concerned the accounts are always active even though one month there will be no charges on their card. I can play Financial games just as well as the banks do.
For the past 35 years my wife and I have been routinely using two credit cards and paying them off every month. Never had an issue with the card companies. I would also add that we never give out our bank account numbers to merchants for routine monthly bill payments. Too many companies have had their databases hacked. Once a criminal obtains your account and routing number, they can empty your accounts as easily as it you handed them your debit card.
2 years ago I started using 2 credit cards INSTEAD of my ATM because twice my ATM has been “hacked” (I hate that word) by nefarious entities causing me to have to go through what you are right now.
I pay off both cards in full each month.
What this has done is cause me to pay attention to what I am spending because I have to physically write out the checks for the credit cards each month, whereas with the ATM card I would just spend and spend and never see the real result.
It’s a little bit of a pain to have to write those checks each month but it is a “real time” safeguard and I’m trying to learn to appreciate it.
During the past 2 years that I have been doing it this way my credit score has slowly worked it’s way up to around 810 right now.
My missus and I use two cards. One is a rewards credit card with Cabela’s and the other is a Discover card with rewards of some sort to Amazon. We use that for almost everything and pay it off regularly. Once in a while we carry a balance.
When I get enough points on the Cabela’s card, I pick up something tangible that will last. One year I got a free Ruger 10/22. I just had to buy the $25 Cabela’s branded scope attached to it. At the time the rifle was about $200-250. Every so often one of the cards gives cash back on restaurants or gas stations and such and the Chief Finance Minister tells me to use a specific card for a month or a quarter to get the rewards.
I always pay off my card in full. But never draw cash on your credit card: interest is payable immediately and is swingeing.
Kim, if you’re concerned about cancellation, maybe leave a balance once or twice a year, then pay it.
I had someone try to use my atm card once for a small purchase. It was declined for NSF. Guess the guy felt sorry for me because he made a deposit.
You shouldn’t use an ATM card for anything other than going to an ATM for cash, really. Maybe from time to time at a store where you swipe/tap the card. Never ever let it out of your sight (like giving it to a waitress) or use it for online bill pay.
Matter of fact, I have a checking and savings with an ATM card in my safe. I won’t say the bank, other than it has no local branches handy here. That’s where my pay goes and what I use to pay bills. I have a local bank with an ATM that I use for cash. Only cash that’s in it is the skekels I plan on using for cash.
For me, I use a credit card for daily stuff and pay it off each month. I used to use an AA card, but the points are wasted since I don’t travel much, so I switched to H-E-B. That one gets me discounts, and I can choose to apply to points to my balance. I’ve never had an issue using any card this way.
They won’t cancel it. I’ve been doing this for years. Sometimes pay it off twice per month.
They also get theirs in transaction fees.
As all the others say, you wont get cancelled. I just use my Debit card to get cash from no fee ATM’s. Note on ATM’s, I spend months down in Florida but bank in Michigan. Publix supermarkets have fee free ATM’s at all their stores for their customers convenience. The store, not some anonymous org controls them. Last year the ATM ate my card. I was freaking out, months away from going home, knowing my bank wouldnt send it to my florida address. The publix manager just opened the ATM and got my card. I have one credit card that I used for monthly fee stuff like netflix. My Amazon card with % back on most everything gets used for every purchase that doesnt charge a fee for credit card use. Note on credit card fees, they’re legal in most states. Under federal law fees on DEBIT cards are illegal. Some merchants will try to sneak a fee on a debit by running it as a credit card.
My wife and I both have two (2) credit cards. One is a high-limit card that we almost never use, the other is a relatively low-limit card that is our day-to-day use and mail-order use card. We pay off the full balance every time we get a statement, and have never been threatened with fees or cancellations.
Note that I said “mail-order” rather than “online”; we do absolutely NOTHING financial on-line. We’ve seen ‘way too many people lose the contents of their checking accounts due to fraud. We pay off our monthly bills by check including all of our utility bills (we just go down to City Hall for the electric, water, and sewer bill), natural gas, internet, e-mail.
The only time I ever tried Amazon my card information was stolen literally within the hour and charges started racking up like a lit pinball machine.. Since it was a credit card I was notified quickly and able to void the transactions (from somewhere overseas) immediately but it was still a pain in the butt. By going on-line, finding what you want, and then making a phone call and then using a credit card, you’ve eliminated several ways that card-fraud can happen…and do it ONLY with vendors/companies that you trust.
One other thing you might want to look into is changing from Global MegaBank to a local credit union. When we moved from the Heart of the Hive™ (Mpls) to TinyTown™ here in NW Wyoming we transferred all of our stuff from a MegaBank to Local FCU (federal credit union). Deposits are insured up to some ridiculous limit that we’ll never see so even if it goes toes-up you don’t lose your money. But the nice thing is that they will generally issue you credit cards given proof of income (even for geezer retirees like us living on SocSec and IRA’s). It’s nice to be able to go into the credit union (we have to drive “downtown” on the way to the grocery store to pay them off) and just transfer money out of a checking account rather than mailing out a check.
Another great thing is that you get to know the few tellers and managers at the place, which on top of being a nice social thing (one of the tellers is our neighbor) is an added layer of security. Kind of a human facial recognition program.
I really like the courtesy, kindness, and yet still professional service that our Local FCU provides; I strongly recommend finding one that you like in your neighborhood.
Amen+++ on credit union. I’ve been with mine near 50 years and everything Blackwing said is spot on. I’ve also found their loan rates on cars and equity loans beat the big banks.
As everyone else has said, no worries about cancellation. I have never paid credit card interest in my life and the banks are always offering more ways to climb deeper into bed with them. They get enough off of the transaction fees at point of sale to jolly themselves along and keep their optimism up that someday I’ll need to carry over a balance. I was raised on the Dave Ramsey juice and it took years to really run the numbers that credit card rewards were worthwhile if you have the underlying financial situation well in hand already.
-8notch
I never use my ATM card to pay for anything. It’s only used to get money out of an ATM. Everything else is cash or a credit card. I don’t care if my credit card numbers get stolen, just call up the bank, tell them there’s a problem and you get a new one. We also pay off our credit cards in full every month.
I don’t think I’ve ever used my ATM/Debit card to pay for anything. MAYBE once or twice. I only ever use it to withdraw cash from my checking account via ATM or the bank teller.
Been using credit cards (plural; different rewards/discounts on each card and I have backups in case badness happens with my primary card) for just about 20 years I pay them off in full every month, and the only time I ever had a card cancelled by the company was when I hadn’t used my AMEX card for something like three years IIRC, so AMEX canceled it due to inactivity. But they let me reactivate my account (new card number) no problem, and I’ve used it regularly ever since with no issues.
As has been said above, the credit card companies’ primary source of income is transactions fees with vendors, not interest payments from card users. You’ll be just fine.
Credit card companies make money three, and sometimes four ways:
1. Charging you interest. If you pay your card off every month they don’t get this.
2. Charging the *merchant* a fee on every transaction. This money gets spent between the bank that issued the card, the network, and the payment processor.
3. Various penalty fees charged when you miss a payment or don’t pay enough.
4. Some cards have an annual fee.
So the more you use your card the more they make *regardless* of whether you pay it off every month or not.
Get a credit card from the Bank. Most of those have a percent paid back based on volume of charges. So you “make” money when you spend.
That is a win win if I ever saw one.
They take a cut of every transaction, like maybe 1.5%, so they’re making money even if you pay in full. So, little chance of their canceling you.
As to your question, my wife and I have several credit cards and NEVER carry a balance, there’s been no hint of cancellation.
However I need to comment on use of the ATM card:
As a retired computer professional I’ve forgotten more about computer security than most people will ever know, I’ve never had an issue with identity theft, and I follow three rules to the point of OCD:
1) Protect your social security number. It goes on government forms, after all the government issued the number to me. Anyone else that wants it, doctors office, whatever, can shit in their hat and pull it over their ears.
2) NEVER give out account numbers on a call which you didn’t initiate. Someone claiming to be from my bank calls about a problem and asks my account number. I’ll hang up and call my bank myself, if it’s legitimate they’ll accept that. If not, see shit and hat above.
3) NEVER use the ATM card except at an ATM thats actually on the property of branch of my bank. Not at a store. Not at a random ATM.
That last reminds me of something that happened in NYC a couple decades ago. An ATM appears in Penn Station, people would go up to it, put in their card and PIN, it would say “Sorry the machine is out of cash” and the user would move on. A couple days later the machine disappeared, so did the money in the accounts of everyone who used it. The machine recorded the card info and PINs, they made duplcate cards, had the PINs and emptied peoples bank accounts. And as far as the bank was concerned the victim did the emptying.
Mark D
“… if I do the above and pay off the credit card balance in full each month…”
No problem, been doing that for more than 40 years on one card, about 20 on the other.
The only reason we have two cards is that one which accumulates discount points on usage is our primary, and the second is a backup, used only during the time when a fraudulent charge on the primary is challenged, and it is cancelled, until a new card with a new number is issued and arrives. The credit card issuer is a barrier between you and the scammer.
ATM/debit cards are deadly, in that a scammer getting the number with trickery or outright theft of the card can clean out your entire bank account with you having no recourse.
For the few times I need cash, I go to my bank and get it from a teller. Less chance of getting mugged for it there too, as opposed to an outdoor ATM under surveillance by thugs.
I have twelve credit cards, 10 of which are from one bank (Chase). I pay on time, in full, every month. Haven’t paid a penny in interest for years, and I carry an 835-ish credit rating. Chase is very happy with me, plus I have over 1M reward points that I’m going to use one of these days to fly first class to somewhere really warm when it’s really really cold.
I haven’t used a debit card once for any purchase, and only for the occasional ATM withdrawal. I use tap-to-pay everywhere I can. I also prefer not to use cash unless I have to, which is my barber, leaving cash tips, and the local pizza parlor. Thazzit. Everything else goes on my Chase cards, whichever ones earn me the most points for the transaction type, then I autopay the full amount.
My wife and I have a hobby that involves giving our bank as little of our hard earned as possible.
Consequently we have not paid 1c in interest to the bank this century.
We have a pathological aversion to debt. Especially casual debt like credit cards.
We run four credit cards. One “daily”, one for my business, one we use exclusively for online purchases, one with a 3rd bank for contingency. We use transfer / intermediary cards when we travel. They are all zeroed every month without exception.
Late to the party, but another one here that uses credit cards (one for myself from my play money and one for household purchases such as gas and groceries) and pay them off every month.
I only use the ATM card for getting cash out, and occasionally doing business at the bank branch for things like notarizing documents (they need the card to verify I’m a customer and so not charge for the service. I keep the ATM card in a separate wallet so that I don’t accidently use it as a charge card.
Credit cards are not a loan mechanism; they’re a convenient way to avoid carrying a wad of cash. Use three or four cards, one at a time, rotating every three or four months. Zero the balance every month. After a year or so you’ll have a credit rating in the 750+ range; then, if you do have an unexpectedly large expense – tornado, hospital stay, car theft, whatever – you can negotiate a one-time loan on good terms.
As other have pointed out, the credit card companies get their pound of flesh in transaction fees as well as interest. You can avoid the interest by paying your balance every month. I’ve been doing that for over 30 years and have never had a card canceled. The fees increase cost — hence prices — to the merchant so you are paying them in increased prices anyways. For large merchants, the credit card makes sense. For smaller merchants, cash may be better since some charge extra for credit card transactions.
If you are a prudent shopper, you can treat a credit card *almost* like it was cash.
I’ve put every expense I have on a single credit card for the last 35 years. I pay the balance off every month directly from checking. I originally did this for the extended warranty on items, but then the cash back craze hit and its become a money maker too. By putting everything on a card (utilities, phone, insurance’s, food, fuel, meds, etc.), the cash back money each month becomes substantial. I just checked on Amazon, $160 sitting in cash back account.
My advice? Keep your bank card and only use it at an ATM to get ready cash. Then use your credit card for purchases like groceries and gas, etc.
Pay the balance on the credit card every month and there’s no interest charged.
If the bank charges you an ATM fee, find a different bank.