Unsecured credit cards aren't safer than debit cards.
This may sound frightening to some people, but I have a confession to make: I’m living without unsecured credit cards. Scary, isn’t it? I stopped using unsecured credit cards in 2008 — mostly out of indignation and spitefulness, rather than avoiding debt. I hated the fees I’d been paying to financial institutions, just for unsecured credit cards, so I rejected the scraps of plastic that are de rigueur in the 21st century.
For more than a year, I’ve used a VISA debit card (replacing high-interest unsecured credit cards) to make everyday purchases like groceries. Admittedly, I’ve felt a bit anxious when whipping out my card, knowing that it’s linked to my checking account. Even while realizing that I’ve escaped debt, as well as skyrocketing fees, etc., a vestige of fear lingers. Why? Because I’m still brainwashed by the credit card industry. Like everyone else, I’ve been warned that using a debit card, particularly online, is not safe. Unsecured credit cards are the “safer” option, we’ve been told.
But is that really true?
The honest truth is I’ve never had a bad experience with a debit card. I’ve never been a victim of identity theft. I’ve never been in a situation where I regretted not using unsecured credit cards and substituting a debit card. What’s more, I just completed 2009 without paying a penny in interest or fees to any financial institution. Not one cent. (That hasn’t happened since I was 18!) The only fee I paid last year was an annual premium of $25 for my rewards program, which I easily recouped by redeeming points for gift cards. My poor little bank didn’t profit from me in 2009 — no, sir — it LOST money. HA! I’m laughing all the way to … well … the bank!
Banks prefer issuing unsecured credit cards. Even though most banks issue debit cards, as well, they hate debit cards. As a result, they’re not above using fear as a tactic to manipulate consumers. Despite the fact that nearly everyone has a debit card in his or her wallet, most people think using unsecured credit cards is somehow “safer”. They cite purchase guarantees and fraud protection and various other benefits. But how much do you truly know about debit cards? What protections does your bank offer? Don’t you think it’s worth finding out?
After reading this fear-mongering CNN article — and especially the comments (you gotta read the comments!) — I’m even more determined to avoid unsecured credit cards in 2010. Fear is a very powerful emotion, but emotions have no place in making sound financial decisions. This year, there will be no more trepidation when using my debit card. I won’t be swayed by terror tactics. Fear is so last decade.
If you’re still in doubt, let’s be logical for a moment. Imagine that you’re a credit card company. Is your goal issuing unsecured credit cards, i.e. making as much money as possible? Or is your goal providing consumers with a feeling of security? Hmmmm. Your interest-free debit card doesn’t seem quite so frightening as unsecured credit cards, now does it?
Hi Girls. Loving the site. It looks great! I will be keeping an eye on it for money saving tips which I dearly (queens english pun) need.
L
I live in upstate New York and am enjoying your site!
thanks and i enjoy reading this blog, take care Metro Cheapo
Hey, just being financially smart is all it takes. I would echo most of what you said except that debit cards are not secure. If you don’t like credit cards, do without, but responsible credit card use is the best way to go. Debit cards aren’t “safe”. Ask anybody who’s lost a debit card or was a victim of ID theft.
Banks do guarantee that all debit cards are 100% fully secure and I’ve never experienced any problems using them — good job pointing that out!
I look forward to saving money together with Metro Cheapo!
Thanks and warmest wishes, gals!
I never use debit cards online, but I will use them at the grocery store or gas pump. No credit card needed, except online. Get a best quality credit card like Chase VISA with rewards points and you’ll feel better about buying online purchases.
I saw something like this on British television … something about credit cards in the UK. Anyway, I still use ‘em for the points and frequent flier miles and other perks. I mostly use American Express.
Nice post!
Getting lower interest rates is simple, but getting money back from a debit card transaction is difficult. I don’t agree with what you’re saying at all. If you don’t want to use unsecured credit cards, fine, just don’t think your debit card is “safe”.
I found your site via google thanks for the post. I will save it for future reference. Thanks
Thanks for the nice post. I always try to bookmark credit-related posts like this one. Awesome site, by the way.
I never thought unsecured credit cards were a bad thing, but now I’ll start using my debit card when buying groceries or gas!
Cool Blog! Checked out the other posts
Metro Cheapo is kinda cool, I have added a bookmark on favourites. If I have a minute, I’ll comment on some other posts and keep reading. Have a cheap day, Cheapos.
I read your blog all the time and I just thought I’d say keep up the good work!
Yeah, exactly the stuff which I was seeking out. Should do an examination of my own unsecured credit cards soon. Thanks.
This Metro Cheapo blog really is the money help for which I was on the lookout. Great post about unsecured credit cards versus debit cards. For certain I will take action on this as soon as possible — you’ve got me thinking about unsecured credit cards, but what about secured credit cards?
I have so many mixed emotions when it comes to credit. In a lot of ways we need it. But I think the companies that run the credit abuse it and trick and take advantage of their customers. Too many people are in debt to have be all one big coincidence. I think the credit industry needs more regulation.
Republican Tightwad: I respect your opinion, of course, but disagree and I mentioned identity theft as a possibility. It’s just my view that the fear of identity theft isn’t as much a financial burden as paying high interest rates and fees, day in and day out, year after year.
Shari L: Getting your money back from a debit card transaction is the same as getting it back from a credit card transaction; the process of claiming fraudulent use is the same — most people don’t know this, but it’s true. Just call Chase or any other prominent bank issuing debit cards.
Lavonda Matkovic: Truthfully, I dislike all credit cards but the secured type can be useful for restoring bad credit.
Thanks everyone for your comments.