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November 01, 2011


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The rewards I get from my Costco American Express card are enough to pay my annual membership fee plus a couple hundred extra dollars as a bonus. Getting 3% back on things like gasoline and restaurants is awesome.

That said, I prefer using a credit card primarily because of the leverage I have if I get ripped off. If I buy something online and never receive it, it's much easier to post a dispute with my credit card than to go to my bank, fill out paperwork, and hope that in 10 business days (i.e. two weeks) they'll give me my money back (sometimes they won't). Also, if my card gets stolen, I don't have to worry about having to deal with a bank account being drained right when a mortgage check is about to hit my account. The security features on all forms of plastic is ridiculously weak, and I try never to have more money in an account linked to a debit card than I could afford to do without.

I've had BofA's USAir Debit card for a year now and have racked up enough points on normal purchases for a free round-trip ticket. That's worth the $35 annual fee for me...we'll see what happens with the $60 debit card fee they're talking about tacking on.

PenFed CU Plat Cash Rewards credit card works well for us. 5% on gas, 1% on all else. Used to have 2% cash back on dining/lodging but that was reduced to 1% recently.

I think the 2% PerkStreet might work better for us but not by much, I'll have to check that out. Thanks FMF.

IMHO, Even better than debit card "rewards" are the fancy checking accounts that give you crazy amounts of interest as long as you use online banking and make a certain number of debit card transactions a month. I've seen these at a number of credit unions, and they offer like 5% interest as long as you make 10-12 debit card transactions a month. Though, I suppose these might be going away very soon.

Des --

Like this?

Credit cards preference with rewards.

Debit cards are only used to withdraw money from ATM.

To be honest i prefer a credit card. I was never really in to debit. I guess it was just what i grew up with. I feel that there is much more flexibility with credit.

True matt, I don't really use the ATM.

If you lose your debit card and don't know it, you can lose everything in your account. If you lose your credit card you are out $50 max.

As an accounting nerd, I've become a fan of credit cards that you can preload with money so you get the benefits and safety of a credit card but still are able to stick to your budget.

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