New, scorched, convert: ANTI debit cards!
Jun 30th, 2004, 08:46 AM
#41
Join Date: Jan 2003
Posts: 74,699
Likes: 0
Received 0 Likes
on
0 Posts
Hi Kismet,
It is not a good idea to use your credit card for getting cash from an ATM unless you have already given the CC people enough money to cover the withdrawl.
It is a cash advance and interest starts to accrue from the moment you get the money.
It is not a good idea to use your credit card for getting cash from an ATM unless you have already given the CC people enough money to cover the withdrawl.
It is a cash advance and interest starts to accrue from the moment you get the money.
Jun 30th, 2004, 09:36 AM
#42
Join Date: Jan 2003
Posts: 11,244
Likes: 0
Received 0 Likes
on
0 Posts
As ira said, it's not a great idea to use your credit card for a cash advance, but depending upon your particular circumstances, you could do it with minimal penalty if you pay the balance off when you get your statement.
For example, if you use your CC in an ATM to draw $300 as a cash advance, you would begin to accrue interest from the time of the withdrawal. If your credit card has 12% annual interest (most are lower), and you pay off your balance when you get your statement, that would be only 1% of the $300 which would be $3 for the cash advance.
Some credit cards charge more that 1% just for the conversion fee.
For example, if you use your CC in an ATM to draw $300 as a cash advance, you would begin to accrue interest from the time of the withdrawal. If your credit card has 12% annual interest (most are lower), and you pay off your balance when you get your statement, that would be only 1% of the $300 which would be $3 for the cash advance.
Some credit cards charge more that 1% just for the conversion fee.
Jun 30th, 2004, 09:43 AM
#43
Original Poster
Join Date: Jan 2003
Posts: 8,637
Likes: 0
Received 0 Likes
on
0 Posts
Hi
I'm assuming that those still reading this thread are interested, so this is my summary above the info to date:
Debit cards can be problematic because if the card is stolen or the info on them is misused, one's checking account is instantly vulnerable. However, debit cards carry Mastercard or Visa logos which makes them universally useful for atm withdrawals as well as purchases.
ATM-only cards are safer because they can only be used for cash withdrawals from a checking account AND require a PIN for use, BUT some ATMs in Europe aren't accepting them since they are not linked to Mastercard or Visa systems. Transaction fees by one's own bank will apply to cash withdrawals.
One can prepay a MC or VI credit card account to result in a credit balance on your line of credit. This should avoid any instant interest charges on cash withdrawals, and the line of credit one already has allows for purchases. Transaction fees may or may not be levied.
Some people are recommending setting up a separate checking account (preferably no-fee) with its own debit or atm card that will contain funds that are just for travel. Since it is not linked to any other account, I would wonder how much money to have in it to account for an emergency. I also wonder how to find a no-fee checking account that will have a relatively low, and temporary balance in it. Does one close it out when the trip is over?
In this scenario, one might also want to carry a back up credit card with a significant available line of credit, in case this atm/debit card is lost.
Any disagreements with the above?
I'm assuming that those still reading this thread are interested, so this is my summary above the info to date:
Debit cards can be problematic because if the card is stolen or the info on them is misused, one's checking account is instantly vulnerable. However, debit cards carry Mastercard or Visa logos which makes them universally useful for atm withdrawals as well as purchases.
ATM-only cards are safer because they can only be used for cash withdrawals from a checking account AND require a PIN for use, BUT some ATMs in Europe aren't accepting them since they are not linked to Mastercard or Visa systems. Transaction fees by one's own bank will apply to cash withdrawals.
One can prepay a MC or VI credit card account to result in a credit balance on your line of credit. This should avoid any instant interest charges on cash withdrawals, and the line of credit one already has allows for purchases. Transaction fees may or may not be levied.
Some people are recommending setting up a separate checking account (preferably no-fee) with its own debit or atm card that will contain funds that are just for travel. Since it is not linked to any other account, I would wonder how much money to have in it to account for an emergency. I also wonder how to find a no-fee checking account that will have a relatively low, and temporary balance in it. Does one close it out when the trip is over?
In this scenario, one might also want to carry a back up credit card with a significant available line of credit, in case this atm/debit card is lost.
Any disagreements with the above?
Jun 30th, 2004, 09:59 AM
#44
Join Date: Jan 2003
Posts: 11,244
Likes: 0
Received 0 Likes
on
0 Posts
That's pretty good!!
The ATM card will be accepted in machines for the particular system, i.e., Plus or Cirrus. My ATM is Plus, and I only had one machine that I tried to use that it wouldn't be accepted. It was never a problem -- maybe because some banks accept both Plus and Cirrus.
I wouldn't really bother opening up a separate checking account just for travel, unless it makes you feel warm & fuzzy. I've been traveling for years with my present account.
Whenever/wherever you are going, have fun, just be observant, and don't sweat the small stuff!!
The ATM card will be accepted in machines for the particular system, i.e., Plus or Cirrus. My ATM is Plus, and I only had one machine that I tried to use that it wouldn't be accepted. It was never a problem -- maybe because some banks accept both Plus and Cirrus.
I wouldn't really bother opening up a separate checking account just for travel, unless it makes you feel warm & fuzzy. I've been traveling for years with my present account.
Whenever/wherever you are going, have fun, just be observant, and don't sweat the small stuff!!
Jun 30th, 2004, 10:47 AM
#45
Join Date: Jan 2003
Posts: 5,271
Likes: 0
Received 0 Likes
on
0 Posts
Take a look at USAA Bank in San Antonio, TX. A no fee chequing account, no minimum balance required, an ATM card (you can apply for a credit card from them and then they will convert the vanilla ATM card to a debit card if you want one), they pay interest albeit automatically when the account passes I believe $1800 and the account will remain open even with a balance of $1.
And here is the big kicker with them...while in Europe you don't have the problem of ATM's charging you a fee for using them, that is a big problem in the US. They will reimburse you up to $15 of such fees each billing cycle when used in ATM's in the USA! That's right, not only don't they carge for, I believe, 10 ATM withdrawals each billing cycle, they reimburse you for fees other banks charge.
It is the perfect account for travelling and should anything unfortunate happen as you are not using it as your primary chequing account (you could you know if you want)none of your checks will turn to rubber while the necessary investigation takes place and they refund your money.
One other point, if your primary bank has a bill paying service, you can go online and transfer money from your bank (or your brokerage account such as Fidelity) to this account for withdrawals.
Take a look at the bank.
And here is the big kicker with them...while in Europe you don't have the problem of ATM's charging you a fee for using them, that is a big problem in the US. They will reimburse you up to $15 of such fees each billing cycle when used in ATM's in the USA! That's right, not only don't they carge for, I believe, 10 ATM withdrawals each billing cycle, they reimburse you for fees other banks charge.
It is the perfect account for travelling and should anything unfortunate happen as you are not using it as your primary chequing account (you could you know if you want)none of your checks will turn to rubber while the necessary investigation takes place and they refund your money.
One other point, if your primary bank has a bill paying service, you can go online and transfer money from your bank (or your brokerage account such as Fidelity) to this account for withdrawals.
Take a look at the bank.
Jun 30th, 2004, 12:48 PM
#46
Join Date: Feb 2003
Posts: 308
Likes: 0
Received 0 Likes
on
0 Posts
I need to fess up to my ignorance and ask for help.
Is there a difference between an ATM card and a debit card? What is the difference?
I use my card to access money from my checking account. It also has a Visa logo on it, but I have to admit I'm not sure why. What should I call this card?
Is there a difference between an ATM card and a debit card? What is the difference?
I use my card to access money from my checking account. It also has a Visa logo on it, but I have to admit I'm not sure why. What should I call this card?
Jun 30th, 2004, 01:05 PM
#47
Original Poster
Join Date: Jan 2003
Posts: 8,637
Likes: 0
Received 0 Likes
on
0 Posts
HI wj1
If you can use your card not just for atm withdrawals, but for purchases, the cost of which comes right out of your checking account, then you have a debit card. Most of these have a MC or Visa logo, and most merchants will accept them either with or without your entering a PIN, not caring if it is a debit card or a credit card. A credit card as you know doesn't come right out of your bank funds, you have to pay the bill each month (or make a minimum payment)
The atm-only card is what it says, you use it only at an atm to get cash (coming from your bank account) and you have to enter the PIN each time.
If you can use your card not just for atm withdrawals, but for purchases, the cost of which comes right out of your checking account, then you have a debit card. Most of these have a MC or Visa logo, and most merchants will accept them either with or without your entering a PIN, not caring if it is a debit card or a credit card. A credit card as you know doesn't come right out of your bank funds, you have to pay the bill each month (or make a minimum payment)
The atm-only card is what it says, you use it only at an atm to get cash (coming from your bank account) and you have to enter the PIN each time.
Jun 30th, 2004, 01:06 PM
#48
Join Date: Jan 2003
Posts: 34,862
Likes: 0
Received 0 Likes
on
0 Posts
This stuff can be really tedious to wade through, even if interesting.
However, there are a couple points I don't quite agree with in some of the above. First, I don't have a VISA/MC logo on my card because it's an ATM-only, but I can still use it in any ATM that is on certain networks. I am still skeptical about that info that you have to have a VISA debit card to use an ATM in Europe. First, those networks are owned by VISA/MC to begin with, I believe, and my bank pays them a fee so my ATM card will be on that network. VISA owns PLUS and MC owns CIRRUS. NOw, given I think they are both sleazy, it wouldn't surprise me if they tried to force banks to only use their debit cards by denying network use for ATM-only cards. They haven't done that yet in the US, and that sounds possibly illegal, but it wouldn't surprise me if they tried, although I might expect a court challenge.
I really think the ATM thing in Europe sounds like a BofA/VISA issue, but I haven't been to Italy or Belgium so don't know. I just wonder why MC would sit by in those countries and allow that.
I do have a comment on some plan to avoid interest charges above on cash advances. You can't. Credit cards charge large transaction fees just to make a cash advance and you cannot avoid that even by having a credit balance. YOu are still getting a cash advance from their point of view. YOu can avoid interest charges, perhaps, but the interest on cash advanced is higher than regular charges so paying the bill by the end of the billing cycle will not avoid huge interest charges because they start from the date of the withdrawal. It's not like a store purchase. No one should do that without checking with their card to see, and I bet they'll tell them there will still be cash advance transaction fees regardless of whether they have a balance.
I really don't think opening special bank accounts for trips is worth the trouble. I sure wouldn't do it, but I hate dealing with that kind of stuff. The odds of fraud are still very low even with a debit card; this seems way overkill.
However, there are a couple points I don't quite agree with in some of the above. First, I don't have a VISA/MC logo on my card because it's an ATM-only, but I can still use it in any ATM that is on certain networks. I am still skeptical about that info that you have to have a VISA debit card to use an ATM in Europe. First, those networks are owned by VISA/MC to begin with, I believe, and my bank pays them a fee so my ATM card will be on that network. VISA owns PLUS and MC owns CIRRUS. NOw, given I think they are both sleazy, it wouldn't surprise me if they tried to force banks to only use their debit cards by denying network use for ATM-only cards. They haven't done that yet in the US, and that sounds possibly illegal, but it wouldn't surprise me if they tried, although I might expect a court challenge.
I really think the ATM thing in Europe sounds like a BofA/VISA issue, but I haven't been to Italy or Belgium so don't know. I just wonder why MC would sit by in those countries and allow that.
I do have a comment on some plan to avoid interest charges above on cash advances. You can't. Credit cards charge large transaction fees just to make a cash advance and you cannot avoid that even by having a credit balance. YOu are still getting a cash advance from their point of view. YOu can avoid interest charges, perhaps, but the interest on cash advanced is higher than regular charges so paying the bill by the end of the billing cycle will not avoid huge interest charges because they start from the date of the withdrawal. It's not like a store purchase. No one should do that without checking with their card to see, and I bet they'll tell them there will still be cash advance transaction fees regardless of whether they have a balance.
I really don't think opening special bank accounts for trips is worth the trouble. I sure wouldn't do it, but I hate dealing with that kind of stuff. The odds of fraud are still very low even with a debit card; this seems way overkill.
Jun 30th, 2004, 01:07 PM
#49
Original Poster
Join Date: Jan 2003
Posts: 8,637
Likes: 0
Received 0 Likes
on
0 Posts
I should have added, that if your card has a Visa logo and is a debit card, but you use it only for atm withdrawals and never for purchases, then you could trade it in for an atm-only card.
That's usually something one has to ask for at the bank, otherwise they seemingly automatically assume you want the debit card.
That's usually something one has to ask for at the bank, otherwise they seemingly automatically assume you want the debit card.
Jun 30th, 2004, 01:44 PM
#50
Join Date: Jan 2003
Posts: 1,171
Likes: 0
Received 0 Likes
on
0 Posts
I think many issuers of VISA/ATM cards are giving you much more protection. I know mine is.
My system is simple. All cards in my under-the-clothes pouch, except when I know I will use them very soon. I carry 2 cards, sometimes 3]
1. My ATM card which has never and will never be used online or as a VISA card in Europe. [I only occasionally use it that way locally -- never out of town]
2. 1 or 2 credit cards. The main one is set to alert me via email if there has been any activity over $100. And I check my email on vacation regularly.
Nothing is perfekt -- but this works for me
)
My system is simple. All cards in my under-the-clothes pouch, except when I know I will use them very soon. I carry 2 cards, sometimes 3]
1. My ATM card which has never and will never be used online or as a VISA card in Europe. [I only occasionally use it that way locally -- never out of town]
2. 1 or 2 credit cards. The main one is set to alert me via email if there has been any activity over $100. And I check my email on vacation regularly.
Nothing is perfekt -- but this works for me
)
Jul 1st, 2004, 09:46 AM
#53
Join Date: Jan 2003
Posts: 11,244
Likes: 0
Received 0 Likes
on
0 Posts
Bob_C, I just called the bank and asked them to turn off the VISA portion so I could use the ATM portion only with a PIN, then when I got back asked them to turn it back on. The only problem I had was when I got back I tried to use the VISA portion before calling the bank -- it was rejected, and I was a little embarrassed. 
Jul 1st, 2004, 10:13 AM
#54
Join Date: Jan 2003
Posts: 1,784
Likes: 0
Received 0 Likes
on
0 Posts
Sorry, Christina, but with my account I can avoid cash advance fees. Of course, always check with your provider.
I am back from Italy and just got my statement. I paid my outstanding balance on my USAA Mastercard online, then I mailed in a $2,000 check just before I left, giving me a $2,000 positive balance (again I used to be able to overpay online, but no more so I mailed the check in at the last minute). While on my trip my credit card statement reports I made $700 in purchases and $490 in cash advances. The conversion rate on the purchases is the same as on the cash advances. Total finance charges for the month is $0 (both purchase and cash advance) and new balance is positive $690.
I did make come purchases with my BoA Visa as well (had the wrong wallet handy) and it gave a worse conversion rate plus foreign currency conversion charge. That one's going in the trash.
Yes, USAA is great to do business with. I don't think they have a Visa or else I would have replaced the BoA one sooner, but I'll check. My husband has the checking account and is pleased.
I am back from Italy and just got my statement. I paid my outstanding balance on my USAA Mastercard online, then I mailed in a $2,000 check just before I left, giving me a $2,000 positive balance (again I used to be able to overpay online, but no more so I mailed the check in at the last minute). While on my trip my credit card statement reports I made $700 in purchases and $490 in cash advances. The conversion rate on the purchases is the same as on the cash advances. Total finance charges for the month is $0 (both purchase and cash advance) and new balance is positive $690.
I did make come purchases with my BoA Visa as well (had the wrong wallet handy) and it gave a worse conversion rate plus foreign currency conversion charge. That one's going in the trash.
Yes, USAA is great to do business with. I don't think they have a Visa or else I would have replaced the BoA one sooner, but I'll check. My husband has the checking account and is pleased.
Jul 1st, 2004, 10:34 AM
#55
Join Date: Jan 2003
Posts: 49
Likes: 0
Received 0 Likes
on
0 Posts
Kay2,
Based on your earlier post, I called my bank and they confirmed that they don't charge any cash advance transaction fee. With a credit balance on by credit card I wouldn't pay any interest or fees for a cash advance other than the ATM charge which is usually 75 cents. Thanks for the good tip.
Based on your earlier post, I called my bank and they confirmed that they don't charge any cash advance transaction fee. With a credit balance on by credit card I wouldn't pay any interest or fees for a cash advance other than the ATM charge which is usually 75 cents. Thanks for the good tip.
Jul 1st, 2004, 12:47 PM
#56
Join Date: Feb 2003
Posts: 12,820
Likes: 0
Received 0 Likes
on
0 Posts
Thanks everyone for the great advices..I checked my ATM card and noticed that it has a MC logos, but is not a debit/credit,is only a debit.
The USAA checking acct.seems quite interesting, perhaps I should try to get one also.
The USAA checking acct.seems quite interesting, perhaps I should try to get one also.
Jul 1st, 2004, 01:23 PM
#57
Original Poster
Join Date: Jan 2003
Posts: 8,637
Likes: 0
Received 0 Likes
on
0 Posts
kismetchimera (great name!)
It's not possible for one card to be both debit and credit. A credit card
accumulates a charge balance as you use it, you receive a statement at the end of the month, and you either pay it in full to avoid finance charges, or you make a minimum payment and carry over the balance. Kay2 has said that if you overpay the balance on your credit card, so that not only don't you owe anything on it but you've overpaid it to X amount, you can draw on that overpayment balance from atm cards and not incur any instant cash withdrawal interest charges, which would normally kick in on a cash advance from a credit card.
On the debit card, each time you use it, whether for cash or a purchase, the amount comes out of your checking account. Each of these transactions is reported on your monthly bank account statement. No finance fees apply, just perhaps whatever checking or transaction fees your bank imposes on your checking account.
I am very grateful for all of the great info above, and I think this has been and will be helpful to others as well.
The only remaining issue, for me, is whether or not I will be able to use my new atm-only card anyplace in Europe that I care to go. Next trip is Paris in December. I'll have a plan b and a plan c just in case.
It's not possible for one card to be both debit and credit. A credit card
accumulates a charge balance as you use it, you receive a statement at the end of the month, and you either pay it in full to avoid finance charges, or you make a minimum payment and carry over the balance. Kay2 has said that if you overpay the balance on your credit card, so that not only don't you owe anything on it but you've overpaid it to X amount, you can draw on that overpayment balance from atm cards and not incur any instant cash withdrawal interest charges, which would normally kick in on a cash advance from a credit card.
On the debit card, each time you use it, whether for cash or a purchase, the amount comes out of your checking account. Each of these transactions is reported on your monthly bank account statement. No finance fees apply, just perhaps whatever checking or transaction fees your bank imposes on your checking account.
I am very grateful for all of the great info above, and I think this has been and will be helpful to others as well.
The only remaining issue, for me, is whether or not I will be able to use my new atm-only card anyplace in Europe that I care to go. Next trip is Paris in December. I'll have a plan b and a plan c just in case.
Jul 1st, 2004, 01:55 PM
#59
Join Date: Feb 2003
Posts: 5,579
Likes: 0
Received 0 Likes
on
0 Posts
Not all debit cards take the funds for a purchase immediately.
My Mastercard issued by Bank One through UBS (nee PaineWebber) and tied to my brokerage account takes the funds for a cash advance immediately but when used for purchases takes the funds from the account once a month only. Because my other credit cards have an additional period to pay (and give me FF miles), I rarely use it for other than cash.
I believe all the brokerages have this same type of account.
My Mastercard issued by Bank One through UBS (nee PaineWebber) and tied to my brokerage account takes the funds for a cash advance immediately but when used for purchases takes the funds from the account once a month only. Because my other credit cards have an additional period to pay (and give me FF miles), I rarely use it for other than cash.
I believe all the brokerages have this same type of account.
Jul 1st, 2004, 11:28 PM
#60
Join Date: Jan 2003
Posts: 1,256
Likes: 0
Received 0 Likes
on
0 Posts
It's very rare that anyone would be pursued. My company nearly lost about $200k in fraudulent cheques, and then yearly about another $100k (until we blocked all ordering from Nigeria. Now they only get hit for about $5k a year) in credit card fraud. But because those amounts are comparatively tiny, law enforcement (we talked to the FBI) isn't all that interested.
