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*UPDATED: On debit cards vs. Credit Cards

 **Updated: See below**

Lynne brought up a very interesting topic when she commented on this post. It seems that credit card companies may be canceling the cards of those who pay their bills in full each month- because they are not making money on them. To this my first response is “Hurrah!” and then I say that proves that you don’t want their card!
Lynne commented that they use their card to pay for husband’s gasoline for the month and wonders what they will do if the card is canceled. Well, you have a few options. If you frequent the same gas station, see if it has a gas card- used just like those gift cards for most stores- you put money on the card and then use the card to pay for purchases, putting more money on the card as you go. For this to work you need to put money on it up front. You can now also purchased limited visa/mastercards etc. at many stores- I just saw this at Walgreens when I was waiting at the check-out lane. You purchase a card worth X amount- paying for it up front and then use it as you would a visa or mastercard where ever you go. Again- this is the pay up front method but then you have the capabilities of the card. As I understand it- people who are concerned about Identity theft etc. use these types of cards for online purchases etc.
Then there is the debit card. A debit card is linked directly to a checking or savings account and you should think of it like an electronic check- once the card is swiped the money is out of your account. A debit card requires you to have a PIN and some people, again concerned about identity theft, are squeamish about using these cards because people can then access there bank accounts etc.
But wait- there is yet another layer to this- the Check Cashing Card. The check cashing card is a debit card with the visa or mastercard logo on it and can be used anywhere visa and mastercard are accepted. (You don’t have to use a PIN. Plus you have the rights and privileges of protection etc. from either visa or mastercard.) This gives you the freedom of use of a credit card without the horrid debt. You are, however, limited by what you have in your bank account!
You need to keep track of your check cashing card purchases just like you do when writing checks- make sure you record your purchases. Here’s 2 easy ways of keeping track: one- you can rubber band your receipts to your card so there right there where you can see them or two- you can slide the receipts directly into your check register for you to record later. Neither of these will work though if you do not take the time to record them in your register! Also of note: if you don’t regularly keep track of your purchases and how much you have in your checking account you could easily become overdrawn. You may find you are able to use the card- be approved for purchase- when you don’t necessarily have all the funds in your account. Now, they won’t let you go majorly overboard- like make a $1,000 purchase when you’ve got ten bucks in the bank- but they just may allow you to go $20-50 over and then whammy you with a nice hefty overdraft fee.
Check cashing cards are also nice when you find that the diner you just ate at won’t accept debit cards or checks- but will accept credit cards.
The key to success is to be mindful of what you are spending and keep track! Think of that card as cash- cause that’s what it’s gonna be to the thief who picks it up! Don’t set your card on that little ledge at the check-out stand or leave your purse/wallet unattended.
You’re best bet is to keep the card in your purse/wallet until your purchases have all been rung up and totaled. Why? Because one of the latest ways of ID theft is to use a camera phone and take a picture of your card while you hold it in your hand or wave it around. This is another reason why I like the check cash card over the debit card- because I don’t have to punch in my PIN and risk someone copying it.
It is very easy to get a debit/check cashing card. You go to your bank and request it. Make sure to read the fine print and ask what the fees are. There are some accounts that limit the number of withdrawals or debits you can make per month and charge a fee for any over. Chances are, that if you are being frugal, you have shopped around and have a free checking account and your card will be the same. We have no fees or restrictions on our check cashing cards with the exception being that we are restricted by how much we have in the account!
Dave Ramsey (there I go mentioning his name again) denounces credit cards- he says you can get the same rights and privileges from a check cashing card without the chance of incurring nasty debt. I agree.
Note: I purposely did not capitalize the card company names because I do believe they have capitalized on me enough!
**Update: Amy Jo left an interesting tidbit in the comments of this post- it seems that in order to further protect yourself from money grubbing thieves, you can put a cap on the amount that can be spent on your check cashing card- this would prevent thieves from "going to town" on your dime. What do you need to do? Decide on a cap amount and talk with your bank about setting up this feature. Easy-peasy!

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8:41 PM, 2008-Feb-3 .. Posted by gabbie427

We have no credit cards. We do have a check cashign card that can be used as a debit or credit card. It has the Mastercard logo on it as you said so it can be used anywhere. Another good thing about these cards is they are issued by your bank and you can if needed put a maximum charge on it for insurance sake in case it is stolen.

For instance, we had saved some extra money to buy a laptop computer with around Christmas time, and paid for it with our card, but had to call the bank to tell them to put the order through, because any orders over $500.00 or a total of that amount in one day is stopped by our bank until they get permission from us. It is another way our bank is helping us keep track of our money. I love that we have this safety feature!

God's Blessings,
Amy Jo

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3:17 PM, 2008-Feb-4 .. Posted by Lynne

Amy,
I have never heard of the check cashing card. Very interesting.
About 4 years ago, the day before we were leaving for a trip, my credit card company (Visa) called me and asked if we had charged $1500.00 on our card to some sort of medical office. We hadn't, and they caught the fraud even before we got the bill. They removed the charge, and at our request they canceled our card and issued us a new card/number.
My husband had used the credit card on the internet to buy an airline ticket (Southwest Airlines) to go to his grandfather's funeral. It was the only time we used our credit card to buy something through the internet. Somehow, Visa knew the thieves got our credit card number from that transaction.
Up until now, we have kept and used our one credit card because it is a LLBean credit card, and we get "Bean money" that we use to buy winter coats, etc. at a nearby Bean Outlet. Usually, with acccumulating the Bean money, a new jacket, boots, etc. is less than $5. I just used Bean money to get a new lunch box and a pair of shoes for me, and my cost was $1.75. They are definitely losing money on me.

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10:42 PM, 2008-Feb-4 .. Posted by Laura

Amy - I wanted to warn your readers about getting overdrawn with your debit card. This past year (2007), while we were fixing up our "new" house to move into it, we were making several trips to the home improvement stores and to fast food places (I know, I know, but we were strapped for time). My husband & I miscommunicated about how much money was in the bank - he thought I said we had more money in the bank that we did - simple misunderstanding. However, the bank let our account get overdrawn by over $1,500.00 (yes, one thousand five hundred dollars) before they called and notified us that it was overdrawn. At that point, it was overdrawn by more than my husband's next direct deposit would be. It was too late to cancel the direct deposit - all we had on hand was a check for $375 (by the grace of God, a refund from closing costs on our house), which we were able to cash and use for food and necessities. It took us 3 months to end the horrible madness caused by the overdrawn account - checks bounced, EFT payments bounced - we were so blessed that none of our utilities got shut off.

I tell this story just to let you know that sometimes, the banks will let you get overdrawn a lot more than you realize - I think we probably spent well over $1,000 in overdraft fees before all was said and done in this situation. I wish they had declined our card, something, anything, when it hit $50 - it would have saved us such heartache and stress, during an already stressful (first time homebuying) time.