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See I told you, this would help!

Coupon Abbreviations
  • SC = Store Coupon
  • MC = Manufacturer Coupon
  • SS = Smart Source
  • RP = Red Plum
  • PG = Proctor and Gamble
Coupon Terms
  • WYB = When You Buy
  • B1G1 = Buy One Get One Free
  • .75/1 = 75 cents off one item
  • .75/3 = 75 cents off three items
  • EXP = Expiration Date

Going Nuts? I can help you understand coupon terms and abbreviations

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Credit cards aren't evil, but debit cards may be.

Yesterday we got the dreaded phone call, “Did you buy $500 in stamps and then make purchases for $400 in shoes in Africa last night?”  Umm… NO!  If you are 6 months pregnant your first response is to cry in moments like this.  If you aren’t pregnant I still give you permission to cry.  Someone invaded our little world and while they didn’t break into the house they did burst my happy little secure bubble.

In the end after a couple phone calls everything is fixed.  The card is closed. A new card is being overnighted to us. Best of all, we are off the hook for all of this person’s stealing.  Things could have not ended so nicely though.  If we had used a debit card things could have ended with me in more tears and us out a chunk of money.

I know big financial planners say that you shouldn’t have credit cards, but I would argue that you shouldn’t ever use a debit card.  Ever.

As long as you are smart and pay off your credit card every month you should use your credit card for every point of sale and online transaction you make.  Why you say?  Well look at the news recently to see how many point of sale issues stores have had losing data to hackers.  Target, Home Depot, Michaels, Harbor Freight, Sally’s Beauty Supply.. the story is all the same.  Its the little machine where you swipe your card that is giving away your data and in some cases (Target’s) your pin you entered too!  It’s also giving your zip code that the transaction was made in away.  In the end the person that wants to steal your money has pretty much everything they need to do that.

What are your options to pay safely?
The way I see it you have four choices.

#1 – pay only with cash.
Very reasonable decision but slightly unreasonable to do.  Now you are visiting an ATM all the time (also not secure places) or the bank on a very regular basis.  Also if your purse/wallet gets stolen you are 100% liable for the theft and lost all funds.

#2 – use your debit card.
This is where many of us have been in the last 5-10 years.  Sadly you if your account information is stolen they now have access to all the funds in your account.  In the end you are liable for the first $50 if you catch the fraud in the first two days. If you don’t catch it within two days you are liable for the first $500 of the charges.  That would break most of us!  The real problem here is that most banks don’t monitor accounts as heavily as the credit card companies do, so to catch the fraud you have to be diligently monitoring your accounts each day.

One thing to also note is the hassle of closing this account if fraud is found.  Your paycheck direct deposits, auto payments to the mortgage and other companies… there is so much that you have to move and change with the account that the hassle can feel unending!

#3 – use Apple Pay or PayPal.
Apple Pay is new to most of us, but the concept is that you enter your credit card information into your iPhone 6.  Then at checkout in various stores you pay by holding your phone near the contactless reader in the store with your finger on the touch id reader.   You are done in seconds, and you never gave your credit card to the store or ran it through the faulty hacker-prone magnetic strip reader.

There are some problems here though, hackers have found that it is super easy to load a stolen credit card into apple pay, so while data you put into is safe, if your data has already been stolen you are still at risk.  The biggest problems though are knowing what merchants accept it and all the folks that don’t have an iPhone 6, iWatch or iPad.  It also only works with select card companies at this time.

If you are paying online you can also choose to use Paypal which is the online version of Apple Pay.  Your credit card information is never given to the merchants, and PayPal then takes money out of the accounts you have given them.  It could be a credit card or even a bank account.  Like Apple Pay, PayPal is not accepted everywhere online.

#4 – use a credit card.
Before you crucify me for teaching bad financial habits, hear this one out.  You are still at the same risk of having your card information stolen anytime your card runs through the magnetic strip reader but… most cards now offer ZERO liability if your card data is stolen.  There is no time limit on this like the debit card.  Another big reason to choose this over a debit card, most credit card companies have entire departments and programs monitoring the use of your card to help catch fraud instantly.  Your local bank doesn’t have this same level of security.  The credit card company was the one that called us yesterday!  Choosing a credit card over a debit card could mean a savings for you of $500 or more depending on when you caught the fraud.

Another Perk of Credit Cards – Rewards

While there are a few debit cards that still offer rewards they are few and far between and not nearly as great as the rewards programs offered by credit cards.  Again if you are smart and pay off the card every month, using a credit card with rewards is the ultimate way to extend your savings with each purchase.  With rewards I would encourage you to think about what you enjoy doing.  If you like to travel then consider airline miles with the Capital One Venture Card or another similar plan, or go for free hotel stays with Marriott points or another hotel chain.  (We have a Marriott card that means over a week of free vacation every year with points we earn!)

Some of the top cards out right now:

Chase Freedom – $0 annual fee earn a $100 bonus right now and up to 5% cashback on select purchases

Discover It – $0 annual fee, $50 bonus right now and cashback on all sorts of purchases

Capital One Venture – $0 annual fee for first year then $59 yearly, 2X miles on all purchases

Amazon Rewards – $0 annual fee, $30 bonus up to 3% back in Amazon credit.

A friend has the Discover It card and has earned $156 over the last year in cash back that you can put towards your statement bill or get in rewards to Amazon and other places.  Another friend has the Chase Freedom and got over $160 in Amazon credit in the last 6-8 months.  That’s way more than your checking account earns in interest!

One Last Reason – Credit History

Using a debit card does nothing for your credit history and report.  It doesn’t show as an open account or show that you pay your bills on time.  Having a low balance credit card that you pay off every month however does great things for your score.

You may think that you won’t need a credit score/history but your credit score helps you in more ways than getting loans.  Insurance companies pull it to decide your rates (better credit = lower rates).  Car rental companies may also pull your history to make sure they aren’t at risk for car theft.  There are a number of other similar moments even for some jobs that your report will be pulled.

Tips for Using Cards Smartly

  • Get an empty checking account register book and enter transactions as you make them, also regularly make sure you match by checking your account online.  This will keep you from being shocked by the end of the month bill.
  • Never use a debit card for a transaction that your card leaves your sight (restaurants etc.).
  • Do not pay online with debit cards or checking account information.
  • Set up recurring payments for things online through your credit card, not a debit or checking account.  If you have trouble canceling you can always get the credit card company to take care of it by telling them the charges weren’t authorized.
  • Buy appliances and other electronic items with a credit card over a debit card to get extended warranties.  Many also offer travel insurance for tickets purchased with the credit card.
  • Asking for a new card number and card at any time you are concerned is perfectly fine!
  • Take full advantage of rewards offered.
  • Call and ask them to never send checks in the mail and to freeze your account available balance.  This keeps you from having your limit raised to unheard-of levels, and keeps you from being hit with mail fraud.
  • Pay it off every month!!

Note: In no way am I saying to spend money you don’t have.  This is entirely based on wise spending and safety.

For more reading:

7 Places to Never Use Your Debit Card – Clark Howard
8 Reasons to Worry About Debit Cards – ABC News