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Which is better for tracking expenses, budgeting, and limiting frivolous spending? - Page 2

post #16 of 24
Don't use your debit card.

I agree with the principle of what people are saying, but there's too much risk of fraud with debit cards. If someone pulls your number at a restaurant, or shady gas station, they'll clean out your bank account and you'll have no money while you fight with the bank. The rules for getting refunded are very different from disputing a fraudulent charge on a credit card.

If there's a fraudulent charge on a credit card, they have to take it off your bill while they investigate it. If there's fraud with the debit card, you're screwed until the bank gets around to fixing it.

Small detail but it makes a huge difference.

And neither do I recommend a regular credit card for obvious reasons. You should instead use a charge card.

A charge card is one you have to pay off in full every month. There are two primary charge card issuers in the US - American Express and Diner's Club. Diner's Club is good (it's branded as a Visa, so you can use it anywhere), but I carry an American Express charge card because I like their features and customer service.

Yes, you have to pay an annual fee. But I think it's worth it, especially if you use the benefits. Amex gives me a few perks I use that offset the annual fee, so I look at it as a wash. You can also pull up a summary of your account online and see just how much you've spent, and they'll give you summaries of particular categories.

So, despite the annual fee, I think that charge cards are the way to go. 25-30 days of float on your purchases is nice, too. Charge cards also look good on your credit report, since you always have to pay them off.
post #17 of 24
It's kinda hard to beat cold hard cash, receipts and spreadsheets... You don't see the immediate effects when using plastic. That's how you end up going "When the hell did I spend 100 bucks on pizza?".
post #18 of 24
Thread Starter 
Quote:
Originally Posted by HiGHFLYiN9 View Post
I've seen a few studies at Consumerist [snip]
Haha, dude @ first glance I thought this said Communist Good point(s?) though, I will need to try this; i've never actually tried the cash-only-spending thing, AFAIK/IIRC. I can't right now because I have about a grand on credit cards (medical bills and auto expenses mostly) but once that's taken care of I shall try it out and see. I wonder if it's better to get cash each day, or a set amount for the week? Also how do you handle paying bills if you're doing this? Checks?

Quote:
Originally Posted by Aynjell View Post
For me it was the opposite. I spend too much at vending machines.
LOL yeah I can see that.

Quote:
Originally Posted by skitlets View Post
I use credit mostly, since I always pay off the balance while accumulating cash back.
Yes, cash back is awesome. If I use my Discover card as much as i'm able (i.e. whenever the place actually accepts Discover card) then I get back about an average of 7$/month over the course of a year. Not a whole lot but it adds up. Same goes for switching banks -- I am now part of a Credit Union, and when money is not tight and I can keep at least 500$ in both my Savings and Checking, I get a little over 6% interest on each account. Again adds up to something like 5-10 bucks a month.
post #19 of 24
Quote:
Originally Posted by Uncle Erik View Post
Don't use your debit card.

I agree with the principle of what people are saying, but there's too much risk of fraud with debit cards. If someone pulls your number at a restaurant, or shady gas station, they'll clean out your bank account and you'll have no money while you fight with the bank. The rules for getting refunded are very different from disputing a fraudulent charge on a credit card.
I mostly agree. Credit cards are quite a lot safer when it comes to fraud.
But as for what the OP as for I debit cards as a clearer choice than credit cards. Cause with credit cards it is not as easy to control how much you spend, and if not cautious you may end up spending more than you can afford. Since you will be limited by the credit limit and not the balance of your bank account.

I live mostly on credit cards, but not sure I would recommend it if you do not have full control of your personal economy.
post #20 of 24
Thread Starter 
Is there such a thing as a Debit/Charge/ATM card that has cashback or similar incentives? Besides the obvious benefit of the grace period that Credit Cards allow, and of course ability to pay for large things (1500$ car maintenance etc) without having that much cash laying around, the main reason I still use them even if I don't "need" to is because of cashback...
post #21 of 24
Best way to limit personal spending I know of is to get married. That did it for me.
post #22 of 24
I voted for "get married".

Worked for me.
post #23 of 24
Quote:
Originally Posted by HiGHFLYiN9 View Post
I've seen a few studies at Consumerist that say that using cash for all your purchases causes you to spend significantly (somewhere around 20% IIRC) less because you're actually touching the money you're spending and you have to physically part with it.
Normally I would agree with you, however I personally know several people who spend every dime they have as fast as it goes into their pockets. I also know people who spend credit uncontrollably and have had to pay heavily to recover from the debt. Spending habits can be good or bad in any arena. The trick here is teaching/learning good habits and understanding what bad habits can do to you and others.

I personally gave up carrying much cash because I have been robbed. I keep a basic amount when I'm around home and a little more when I go out but otherwise I use my debit card. Then I can track all my spending and see how good or bad I've been at the end of the month.
post #24 of 24
Thread Starter 
Quote:
Originally Posted by Sherwood View Post
I voted for "get married".

Worked for me.
lol.

Yes but see, instead of money, you end up spending yourh ard-earned sanity, time and energy.
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