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Posted
Sep 10 2009, 08:20 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This guest post comes from Frank Curmudgeon at Bad Money Advice.
I have a debit card. I think. It's the ATM card my bank gave me. It's got the MasterCard symbol on it, so I think that means I can use it to buy stuff. Of course, this is just a theory. In the 10 years it's been in my wallet I've never thought to test it out. Why would I?
I am going to admit right here that I am pretty obviously missing something when it comes to debit cards. Debit card transactions now outnumber credit card transactions. This mystifies me. I can think of only three reasons to carry a debit card rather than a credit card.
- You are considered a poor credit risk and cannot get a credit card.
- You can get a credit card but will not because of ethical or religious objections.
- You find it too difficult to overcome the temptation to borrow more than you should if you carry a credit card, so carry a debit card that will limit your spending to cash you actually have.
I can't get my head around how half the transactions in the country could be made by people in one of these categories. I know credit standards are tighter than they used to be, but I am sure that the vast majority of folks can get a credit card if they ask nicely. Ethical and religious objections can't cover very many more.
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Posted
Sep 08 2009, 11:00 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
Prepaid debit cards are rapidly taking the place of paper checks for all sorts of financial transactions.
A few examples:
- Wal-Mart, the nation's largest private employer, will stop issuing checks to employees who don't use direct deposit -- about half of its workforce. Instead, their pay will be deposited into a debit card account, our partner site ConsumerAffairs.com reports. (Those employees will get a checkbook just in case they have to pay a bill the old-fashioned way.)
- Social Security recipients who don't have bank accounts can get their benefits on a prepaid debit card.
- School teachers in New York City are being reimbursed for (some of) their out-of-pocket purchases for classroom supplies with a debit card now, rather than a check, says "Flexo" at Consumerism Commentary.
- Verizon is giving rebates on new phone purchases with a prepaid debit card.
Clearly there are some advantages to this:
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Posted
Aug 11 2009, 03:17 PM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
Is there anything an iPhone can't do, except perhaps scrub the toilet (near the toilet bowl is not where you want your phone to be) or take out the trash?
And now, we have to wonder, could smart phones make bank tellers obsolete? (You've seen tellers from time to time, haven't you? Always helpful and smiling despite standing all day long for horrible wages.)
A privately owned bank that has one brick-and-mortar branch but serves mostly U.S. military members around the world has debuted a new feature of its iPhone app that allows customers to deposit paper checks electronically.
You photograph both sides of the check "and once you hit the send button, that image is going into our deposit-taking system as any other check would," Wayne Peacock, a USAA executive vice president, told The New York Times. At that point, you can void the check and shred it.
Many have heralded this advance. Chris Ziegler of engadget wrote, "The problem with banks, you see, is that they're one of the few remaining weak links in our ultimate goal of eliminating all human interaction. ... Fortunately, USAA ... is helping to close that loop with its Deposit@Mobile service."
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Posted
Jul 29 2009, 11:06 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from James Limbach at partner site ConsumerAffairs.com.
A new survey of overdraft fees charged by the nation's largest banks reveals that bankers are hiking fees, adding new fees, and shortening time limits to trigger fees when banks pay overdrafts and extend credit to families struggling to make ends meet.
The Consumer Federation of America blames the Federal Reserve for failing to protect consumers from escalating and multiplying overdraft fees.
Testifying before Congress recently in support of President Obama's proposed Consumer Financial Protection Agency, the CFA said regulatory inaction in just this one area is costing hard-pressed consumers more than $17.5 billion during the worst economic downturn since the Great Depression.
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Posted
Jul 24 2009, 07:05 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Dough Roller.
Earlier this week we took a look at how to get your free FICO credit score from myFICO.com. Operated by the Fair Isaac Corp., creator of the FICO credit score, it offers consumers a free credit report and FICO credit score when they sign up for a 30-day trial of Score Watch. The FICO credit score myFICO.com provides is from Equifax, one of the three major credit bureaus.
And that's where some confusion can creep in.
There are three major credit bureaus: Equifax, TransUnion, and Experian. And each of these credit bureaus calculates a consumer's FICO credit score, which can be and usually is different for each credit bureau. In other words, you likely have a different FICO credit score from each of the three major credit bureaus. And to add to the confusion, each of the credit bureaus calls its version of the FICO credit score by a different name.
So let's quickly sort all this out:
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Posted
Jul 21 2009, 05:39 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from Jim Wang at partner blog Bargaineering.
This may be sacrilegious to say as a personal-finance blogger, but I've never been a fan of debit cards.
I'm biased, though. I think I prefer credit over debit because I've never been in credit card debt. I've never been on the business end of the tactics used by the credit card industry. I credit that to a fear that my mom would be angry with me, rather than my own self-restraint. But either way, I have never paid a penny of interest to a credit card company.
That being said, here are eight reasons why I think credit cards are better than debit cards, which I hope you'll enjoy arguing with me about in the comments.
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Posted
Jul 14 2009, 02:51 PM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from Mark Huffman at partner site ConsumerAffairs.com.
It's hard to believe the nation's banks could be in such rocky financial condition, considering the amount of money they collect from their customers in the form of fees.
Charles, of Cary, N.C., says he's been a BB&T customer for five years, and claims to have spent more than $3,000 per year on overdraft fees.
"My last overdraft, which I ran 29 cents over in the account, cost me $200," Charles told ConsumerAffairs.com. "This is highway robbery and they know it and I know it. It's a shame no one has ... put a stop to this."
If someone were to put a stop to it, banks might be even less profitable. They clearly count on customers overdrawing their accounts and triggering overdraft fees. And those fees can add up to some pretty sizable sums.
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Posted
Jun 26 2009, 05:00 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Dough Roller.
Have you ever been turned down for a checking account? While denials are more common when applying for credit, you can also be declined when applying for a bank account.
If you have been declined, it's likely due to a reporting agency that many have never heard of, but has a lot of information about and influence over banking customers. It's called ChexSystems.
Most have heard of the three major credit reporting agencies -- Experian, TransUnion and Equifax. But there is a lesser-known but equally important reporting agency for checking accounts called ChexSystems. Run by Chex Systems Inc., ChexSystems provides account-verification services to its financial institution members to aid them in identifying account applicants who may have a history of account mishandling (for example, people whose accounts were overdrawn and then closed by them or their bank).
We'll take a look at ChexSystems and how it works. Then we'll look at how you can get your ChexSystems report.
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Posted
Jun 09 2009, 06:27 PM
by
Donna Freedman
Rating:
Money Blog: Smart Spending Blog - MSN Money
Recently I opened a new checking account to get free money from the bank. Since I had the option to give the account a name I called it "Home," as in "a home of my own."
Did that really make a difference?
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Posted
May 04 2009, 05:03 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly.
On the first day of college, I opened my first bank account.
The gym was filled with registration tables, not just for classes and clubs, but also for local businesses wanting to sell themselves to the students. There were even a couple of banks. Because I was getting a small payment from the school to cover living expenses, I needed to open a checking account.
The two banks had very different methods of attracting students. One displayed a sign that said "free checking." The other was handing out Frisbees. My choice was easy. I wanted the Frisbee. (Free checking? How boring.)
I signed up for my checking account, got my free Frisbee, and spent the afternoon on the quad, tossing the disc back and forth with my roommates. When it was time for dinner, I took the Frisbee up to my room, put it in the closet, and never used it again. But I had that checking account for nearly 17 years.
Classes started. I forgot about the Frisbee, and I forgot about the checking account. The next month, I received my first bank statement. There was a $5 service charge, but I didn't care. It was just $5, right? I accepted the fee as part of the package, and as part of being an adult. My parents had always paid service charges on their bank accounts, and I expected I always would, too.
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