I don’t understand people who don’t use credit cards. Not only do you get an interest free loan for 30 days, you also get rewards points. Perhaps even more importantly, you get fraud and conflict protection.
In “When Saving Money Is No Longer Worth Your Time But You Do It Anyway,” I called up my credit card company to dispute my $35 Walgreen charge out of principle because I felt the pharmacist had misled me. Instead of the credit card company filing a dispute, they simply credited me back $35 dollars, no questions asked.
Getting travel rewards points is great, but what I really like about a credit card is travel insurance. Discover It offers automatic travel accident insurance, reimbursement for expenses if your bag is lost or delayed, trip cancellation coverage, and $0 fraud liability. When I’m on vacation or traveling for business, the last thing I want is to stress about is crap that’s outside of my control.
Instead of me spending hours disputing charges or recuperating losses, I’ll just call the credit card company to dispute and recuperate for me. The older and wealthier you get, the less you want to sweat the small stuff.
HOW A CREDIT CARD RECENTLY SAVED ME MONEY AND A FRIENDSHIP
I have a friend who has a spending problem. He’s accustomed to the finer things in life, but he doesn’t make an income level to allow for such luxuries. This is a classic problem in America that results in people getting into crushing debt. So what are you going to do if you’ve maxed out your credit cards and can only afford to pay the minimum? Use a friend’s credit card, of course!
About a year before this incident, I gave my friend my credit card while he was traveling to buy some “necessities” because his card was declined. Knowing that my friend was good for paying me back, I texted him my credit card’s details. My friend did pay me back a month later and all was good.
Then one fine month, I checked my credit card statement to see a $468 charge at one of the finest restaurant establishments in Los Angeles. Perplexed, I called the credit card company to state that I never made such a charge. I wasn’t really worried I’d be out $468 thanks to my credit card’s history of taking care of me. As a writer, I was more interested in the story.
The credit card company opened up an investigation and mentioned I wouldn’t have to pay the charge until they figured out what happened. During this time I did some Sherlock Holmesing on my own by seeing who on social media had been to Los Angles on the date of the charge. Lo and behold, my friend who borrowed my credit card from a year ago posted on Facebook a fabulous post of him and three women eating brunch at the establishment on that exact date!
Holy shitake mushroom! I can’t believe my friend actually used my credit card to eat a $468 brunch and pay for the meal with my credit card. Just to make sure that my friend was indeed the perpetrator, I called the restaurant directly to ask about the charge. They didn’t give me a name, but they did acknowledge the card was used by a person that fit my friend’s description and apologized for what happened. Given I had a pretty good idea of who used my card, I told them not to press charges, but to at least credit my card back because I did not authorize the charge nor was I at the restaurant at the time.
The restaurant told me they had to first investigate, and would get back to me in a couple days. When they got back to me they said they didn’t want any trouble and that my charge had been reversed. When I asked them how they could have charged my credit card when I wasn’t physically present and without my permission, they said that apparently, the patron was good friends with one of their waiters. He just slipped the waiter my credit card info (remember my friend didn’t physically have my credit card on him, only the info) and the waiter went ahead and punched in my digits.
Such conduct is completely unacceptable in the restaurant business in case you are wondering. In order for a credit card to be charged without the card or the person being physically present, the general practice is to fax over a copy of the card with a letter from the owner authorizing a charge to be made with a signature.
The restaurant apologized to me again, reversed the charges, fired the waiter, and offered to buy me lunch next time I’m in town. I’m definitely taking them up on the offer and inviting a couple of my friends. Furthermore, I’ve never spent over $100 a person for brunch, so that should be quite a boozy experience. Champagne and caviar for everyone!
I shot my friend a text and asked him how his brunch at the LA restaurant was. He immediately knew what was up and apologized, saying once again that his credit card was declined. I believed that his credit cards were all declined because he consistently spends way more than he makes. He’s got a lot of pride, and when guys have a lot of pride and a desire to impress the ladies, spending lots of money becomes irrelevant, especially if it isn’t your money!
My friend said he’d send me a check for the cost. I was tempted to accept his check given that would mean that I made $468 for my hassle, and I would force him to pay for what he purchased. But I told him to forget about it, and to never use my credit card again without asking me first. He said he’d send a check in the mail anyway to buy me lunch to make up for all the hassle. Fine, let’s move on. The check never arrived.
What my friend did do was go back to the restaurant and settle the entire bill with cash. I’m sure it was an embarrassing experience, but something that was necessary to build character. I respect him for owning up to the situation, although I do feel bad for the waiter for getting let go. I specifically asked the restaurant to be merciful to any staff during their investigation. I told them that everything was probably just “a big misunderstanding.” But unfortunately, the restaurant didn’t listen.
A CREDIT CARD RELIEVES STRESS
I’m a very forgiving person because I’ve messed up a ton in my life. I understand greed, taking advantage of friends, stealing, lying, wanting to make a good impression even though it was fake, and showing off because I’ve done all this stuff before growing up. Only when I started college did I really calm down and focus on being a more outstanding citizen. I just didn’t care as much when I was growing up for some reason.
I realize that some people are just late bloomers. Just look out how many people still live with their parents in their 20s and 30s nowadays. We’re delaying adulthood largely due to rising costs of tuition and housing. It makes a ton of sense to live with one’s parents for several years after college to save on rent in order to buy a place or pay off student loans.
Perhaps true friends don’t do what my friend just did. But this is the only time such an incidence has ever occurred. All other times have been good, and I don’t expect this will ever happen again because I changed my credit card number. I’d much rather have harmony in my relationships that conflict.
Even though my friend charged $468, I knew with absolute certainty I wouldn’t be at a monetary loss because my credit card company would protect me. The trick was for me to manage the credit card company from going FBI on the investigation so that my friend wouldn’t get in trouble with the law. Having an acquaintance is better than having no acquaintance at all.
Whether it’s buying a new product, going on vacation, or protecting yourself from fraudulent charges, using a credit card is an absolute no brainer. The rewards points are a great bonus, but the real benefit is peace of mind.
Track Your Net Worth For Free: In order to grow your net worth, it’s important to thoroughly understand the details of your net worth. As soon as I started tracking my net worth through an Excel document 12 years ago, I was able to optimize my money for the greatest returns. In 2012, I signed up for Personal Capital’s free financial dashboard that tracks your net worth for you once you link all our accounts, analyzes your investment portfolio(s) for excessive fees, provides monthly cash flow analysis, and helps you forecast your retirement.
There best two features are their 401k Fee Analyzer, which showed I was paying $1,700 a year in fees I had no idea I was paying. The next great tool is their Retirement Planning Calculator, which uses your real data linked to assess your retirement future. It’s a no brainer, and totally free to use!
Refinance Your Student Loans: SoFi is a fantastic social lending company that provides rates as low as 1.9% variable with auto pay and 3.5% fixed with auto pay. The reason why they can offer lower rates than the rest is because they analyze you based on merit, quality of employment, and education besides just a credit score and financials. There is zero origination and prepayment fees. Offer terms are from 5, 10, 15, 20 years in both fixed and variable. Both private and public student loans can be refinanced.
Besides low rates, one of their best features is their unemployment benefits. If you lose your job while repaying your loans, you don’t have to pay your loan for up to 12 months while you look for a new job! Interest will still accrue, but having this cash flow break is a huge benefit. They also provide job assistance guidance as well. You can apply to refinance or apply for a new student loan here.
Check Your Experian Credit Score Today: For only $1 you can check what your latest Experian credit score is straight from their website. It’s a good idea to see what your credit score is before applying for a loan. If it’s below 720, you won’t get the best rate, but at least you can spend time to improve your score. Furthermore, 1 out of 4 credit reports have errors, negatively affecting one’s credit score. I had a $7 late electric bill that crushed my credit score by 100 points and almost derailed my mortgage refinance. The scary thing is, I had no idea for years! Check your credit score today.
Updated for 2016 and beyond.