Tell me if my thinking is correct: since debit card fraud is not covered by the car issuing bank, but most credit cards are (expecially American Express), then I am thinking of prepaying into my credit card instead of the checking account my debit card uses, so that even though I get a cash advance from the ATM I do not have any finance charges. Yes, I know there are transaction and/or conversion fees, but at least I won't have the finance charge and the risk. Correct thinking?

I used my ATM card all across Turkey, and kept credit card for one hotel and a couple of gas fill-ups. Since ATM card has PIN, and since daily withdrawals are limited, not sure if there is high risk here.

I'm not sure your credit card company will let you pay more info your account than your balance owed. Perhaps you can buy something, pay the balance, then return the thing you purchased to give yourself an artificial credit - but be careful, the credit card company may wind up sending you a check for the credit! And you might still wind up with finance charges.

You can ask your debit card bank to limit the amt. of money you can withdraw each day, so that limits that amount you could lose, worst-case scenario.

I can think of two things working against this idea.

The CC companies don't like to be used as a bank. If I overpay my CC, the CC company immediately sends me back a check to ensure the balance is 0 or in a position to charge interest. The fine print also talks about the rule against creating a credit.

The CC companies define how the financial charges are computed to always benefit the company. The fine prints, if you can understand the convoluted way they compute these charges, make it difficult to avoid the high finance charges.

I think your plan will not work because credit cards charge you a cash advance fee REGARDLESS of what your balance is with them. Check it out with them, all the ones I've ever heard of do. They aren't a bank for you, it isn't a way to just deposit money. The cash advance fee on CCs is extremely high, and you will get that charge no matter what, I believe (like 5 pct of the amount or whatever). Now it may be true there is no finance charge, sure, but it is more than a small fee like with debit cards for the transaction.

And aside from that, some cards won't let you keep a big balance in it.

I don't really understand your logic about debit card "fraud" from getting cash at an ATM. What kind of fraud could you be protecting against by using an ATM? CC's help with purchase disputes.

Hopefully you are not talking about cash advances on your CC. Withdraw the cash from your bank account.

"<i>so that even though I get a cash advance from the ATM I do not have any finance charges.</i>"

Sorry, but it doesn't work that way. Even IF your credit card company allowed you to run a negative balance, a cash advance is a cash advance and carries fees. . . . .

Use an ATM card to get cash, and use your credit card to make some purchases

Get ATM card from the bank, make sure it's ATM only, so nobody can make purchases, and you will only withdraw cash using your pin number. ATM cards are safer then debit cards.

If you use your credit card to get money (a cash advance or a loan) you pay an interest rate (sometimes as high as 20%) starting the day you take out the money until it is paid off, which is usually a month later when you get the bill. This is expensive and unnecessary.

If you have an ATM card why can't you just take out money in the form of cash from the ATM machine. It is much, much cheaper.

nanabee, read the top of the thread. The point of this idea was to use a credit card to avoid possible fraud when using a debit/atm card, since credit cards are supposed to have better protection from fraud than debt/atm cards. I think the consensus here though is that it's probably not going to work to pay in to create an artificial credit and avoid interest/finance charges on cash withdrawals using a credit card...

Or get a different bank that does cover debit card fraud. Both my bank (BofA) and my local credit union guarantee against debit card fraud. Both of those cards carry Visa logos and can be used for purchases. That includes availability of funds within 1 day, and no responsibility for fraudulent usage.

With both banks there IS some temporary (a day or 2) risk of funds unavailability in the case of fraud. It's not a long term risk, and is not something I'm concerned about - I carry both cards with me wherever I travel. As stated above ATM only card would further lower the risk.

I agree with the others about never using a CC to get cash. I do think that credit cards actually are quite happy to act as your bank and give you a cash advance if that's what you want to do. Happy while they count the $ you pay for that privilege.

You need to check with the card if they will let you do that. Most will not let you prepay before you make charges.

You'll have to contact American Express, but as mentioned you'll likely be charged the cash advance fee and interest from date of withdrawal regardless. With credit cards (read the back of your statement and your agreement), cash withdrawals and handled separately/differently than purchases.

Debit cards now have the same protections as credit cards. Difference is that if your debit card is lost/stolen, your balance can be quickly wiped out without your PIN. All can be sorted out eventually, but not likely during your travels.

Totally agree that, if you're worried, you should get an ATM only card. That's what I carry and leave the debit card in the room safe for backup/emergencies.

Note that many banks have added conversion fees to ATM withdrawals.

By your logic you shouldn't be using your debit card at home as debit card fraud happens everywhere not just "elsewhere".

Hey Hum,

>...since debit card fraud is not covered by the card issuing bank,...<
Who told you that? If your debit card is accessed by an unauthorized user, you are safe. It takes longer to get your money back than with a CC.

>even though I get a cash advance from the ATM I do not have any finance charges.<

You will have interest charges accruing from the moment you get the cash until the day your payment is due. Some CC companies bill you a minimum amount (about $35) just in case you decide to pay the cash advance the next day.

Why not just do it the traditional way? - Pay what you can with a CC and use your ATM card for cash.