Use A Credit Card To Protect You From Everything Bad

Bad boy, credit card fraudI 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 double travel rewards points with the Barclaycard Arrival World MasterCard is great, but what I really like about the card is travel insurance. Barclaycard offers $200,000 in 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.

CONFRONTATION TIME

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.

Readers, any types of credit card fraud stories you’d like to share? Has someone you know ever used your credit card without your authorization? How did you resolve the issue? Do people who shun credit cards have a problem with spending?

 

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Jordan Hanson says

    I could not agree more. For a while, I was against credit cards myself because I did not think I was mature enough to handle them. As I have matured, I have increased the uses for my credit cards. Right now, I still only have one but it is nice to know I can get groceries and get rewarded for using my credit card to make the purchase. I was scammed $17 dollars from my credit card one time and called Wells Fargo for the dispute, within a week the money was credited back to me. My thing with credit cards is that I only spend money on credit cards I know I can repay within the 30 days.

    • says

      Jordan, good stuff on only spending on things you know you can repay within 30 days. Many people violate this rule, and then blow themselves up financially. So I do wonder whether those who shun credit cards basically all have some overspending story to share.

  2. Austin says

    I have a friend who is very concerned with appearances. He is fairly wealthy but he and his wife are also very concerned about being and appearing wealthy if that makes sense. We went to dinner the other day and he had the Visa Black Card. I almost busted out laughing. I knew that this was absolutely the dead last worst consumer card you could have but he doesn’t care because it looks neat and exclusive when you hand it to people.

    I’ll stick with my Amex Blue Cash Preferred. Better rewards at a better cost. And, since the iPhone, I won’t be calling any credit card concierge to get me in to Waverly Inn.

    • says

      I just can’t justify the $400/year Visa Black Card fee. Maybe if I was traveling a lot and it was a corporate card.. but personally, I don’t spend enough. Even car dealerships limit one to $3,000 usually.

    • says

      If nothing else, change the card number on that account! Your cc company should be able to change the number without much trouble – totally worth it since your friend clearly can’t be trusted.

    • Tom says

      Agreed, that doesn’t sound like much of a friend. Using your friends cc without letting them know is really messed up

    • mysticaltyger says

      I totally agree. This guy is no friend because he can’t be trusted. The thing is, Sam, you wised up in college. This guy is what age? Probably at least in his mid 20s, if not older, right? He’s old enough to know better. Part of the reason why people are still adolescents in their 20s and 30s is because we make too many BS excuses for them like the ones you made for your “friend” (other than housing costs & high tuition, which are legit, for the most part).

      • says

        To me, money isn’t worth making a huge stink about bc I’m older and have money. To him, it’s more important as he has less of it.

        My hope is that by showing clemency and kindness, he’ll realize his ways, feel bad, and not do it again.

        When my father let me sleep and woke me up the next morning to tell me what I did was wrong in the 4th grade, I was so appreciative he didn’t scold or hit me on the spot that I think I became a better person as a result.

  3. Greg says

    C’mon, Sam…these last 2 posts have me disappointed. First, you go to a pharmacy after having some drinks (impaired judgement?), and are told the flu shot you requested isn’t covered by insurance*. Your instinct tells you to wait and check with your insurance but you can’t be bothered so you go ahead and get the shot. You accepted a service and were given a service, now it’s the pharmacy’s fault and you not only received a refund from your credit card but are attempting to get a reimbursement from your insurance company for the same charge. Next, your “friend” fraudulently uses your credit card. YOU willingly gave your card information to somebody who obviously couldn’t be trusted but the restaurant, which delivered a service in good faith, is the loser. You received a refund from them and are planning on extracting from them some fancy brunch in the future, but are completely willing to let your friend off the hook. In fact if this “friend” comes through and pays up you are planning on keeping that money, also. Why not make the friend reimburse the restaurant?

    *The pharmacist probably didn’t intentionally mislead you. He/she doesn’t know that product A is covered but B is not with your insurance, only that the claim he/she submitted for A, which is in stock was denied. Also, it appears you actually received a better product. Your insurance company probably only pays for the cheaper multi-dose vial flu shot that has a preservative (mercury) in it. Sounds like you received a single-dose syringe which is preservative free but costs more.

    • says

      One of the goals of this post and my Walgreens post is to highlight human nature and how we are flawed, especially myself. Why do we do things and judge others for doing things? I really enjoy opening up my flaws and failures for criticism, b/c it helps remind me how much more I have to do to become a better person.

      Actually, I did forget one part of the story. My friend did go back to the restaurant and reimbursed them with cash. New addition to the post:

      “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.”

      I wasn’t out for blood. I just wanted to understand how a restaurant could charge my card without the card nor myself being physically present. This is a very important issue for consumer protection.

      If you have more tips for me on how to act and be a better person in different scenarios, I’m all for it. Please also share your story too.

      • mysticaltyger says

        I do think this guy going back to the restaurant to pay the tab in cash shows he might be friend worthy. He at least has a modicum of character…but it’s pretty tenuous.

        I sort of agree the restaurant should be held accountable, though. There was no way they should have taken your card. The restaurant firing the waiter was appropriate. The waiter who was fired needs to learn something about character and making real friends.

        • says

          Imagine if every single restaurant disregarded the protocols of being able to use credit cards where the owner and card was not present AND there was no pre-approval from the owner.

          We would have one of the biggest world wide credit card scams.

      • greg says

        Sam, I applaud you for being so open and exposing yourself to criticism. One comment I have regarding the new addition to your story. You state you were concerned how the restaurant could use your card information without either you or the card being physically present. Keep in mind you originally gave your friend your CC information with the full expectation that it would be used without the you or the card present. Back to the original question you posed…I use Credit Cards whenever I can both for the rewards and also the consumer protection you are referring to. Interestingly I have never had to resort to a dispute but the threat of doing so has helped me on several occasions with merchants.

        • says

          Correct, for specific use on his trip a YEAR AGO, and he paid me back. This new incident, I was not given a heads up, nor did I expect him to still have my credit card to use on a lavish brunch to impress the ladies.

  4. says

    So True! I use my credit card for everything and pay it off every month. Saves me 2% on everything I buy. Plus the other perks travel insurance and rental car insurance.

  5. Jools says

    Hi Sam- I have a doozy of a credit card story for you and I’d like to know what you think. Last fall my husband and I travelled to Morroco. Our card (shall I mention the name? It’s a MasterCard held by a very large bank rhymes with “shitty”) kept being declined. What was going on? My husband payed last months bill with a check from his Credit Union’s checking account. On time. It had been a large bill to cover most of the prepaid hotel reservations for our trip. My husband spent many stressful hours on a cell phone in remote areas of Morroco trying to figure out what was wrong. Finally he got thru to the cc company. Our check had been returned. Wha??? He called the credit union. We had plenty of $$ in the account and no check had been returned. He called back the cc card company. He did a wire transfer to pay last months bill ($$,$$$.). Still not knowing what had happened with his first check but assuming it was his fault that in the excitement of leaving he had done something wrong. Now for the kicker. After he wired payment, the bank representative said Thank you for your payment but your card is no longer good. They fired us! We have had this card since 1994! ( and we have paid in full every month ) We were so stressed! We now had only his business card and my useless (in Morocco) Amex left so paying for things would now be a real hassle. We literally Lost Sleep over this. On our Once in a Lifetime Trip. When we got back home my husband was on the phone again for hours trying to figure this out. Finally, he got lucky and spoke to someone at his credit union’s bank who remembered returning a check for a large specific amount to this bank. Our credit card company had asked for the money thru a routing number. And, they had requested the money with the wrong account number! The account number they used did not have sufficient funds for payment ( lucky for that guy!). Explaining this to our c card company was another nightmare. They kept saying they Never make these kind of mistakes. Impossible. Lol. The union representative couldn’t fax us proof because it had someone else’s account information but she said she would be happy to call our ccard co. It became unnecessary because Finally someone looked at the check and realized it had Indeed been their error. They did reinstate us but it’s months later and I am still pissed! What to do? We didn’t want to dump the card and have it affect our credit rating. I know this kind of messes up your credit card as hero story. Sorry about that…
    p.s. I love your blog.

    • mysticaltyger says

      I would dump that card. They treated you like crap and what did they give you to compensate for it? Don’t worry about your credit score. It may take a minor it, but it will be fine. It’s interesting the people who seem to worry the most about their credit scores are probably the folks who need to worry the least.

    • says

      The worst thing about your story is that it “killed your vibe” on vacation. Business has got in the way of my vacations too, which is more annoying than anything when it is an accounts receivable issue.

      The one rule I know is to always call the credit card company before traveling overseas, and maybe even out of state if they are really sensitive. Did you do that?

      I would just open up a new card. Your credit score won’t be adversely affected. Even so, I can’t imagine more than 10-20 points which would soon recover.

      Thanks for sharing your story!

  6. Lewis says

    That’s so great to hear the protection that credit cards offer. I often worry about using credit cards at restaurants because there is always a portion on the receipt for tips. I do tip, but I worry that someone will enter the amount incorrectly or fraudulently. From this article I learned that if that happens I could probably call the CC company and not have to deal with the restaurant directly. Thanks.

  7. mysticaltyger says

    Anther thought I had on this, Sam was your whole idea of the wealthy blending in and making themselves invisible. There are a lot of good reasons for that…partly to protect yourself. But also to set a positive example. When you get a lot of rich people who blow money on flashy luxury goods that aren’t necessary, it inevitably encourages people who really don’t have that kind of money to do the same. The more socially responsible thing to do is to not spend money on unnecessary luxury stuff.

  8. says

    Hopefully the people that don’t use credit cards are the people that know their weaknesses and know that they will just overspend and end up in debt.

    I have a lot of friends that refuse to use a credit card at a bar because they will spend way more than they would have if they just used cash. Though I admit it’s not the best position to be in, if they know how to prevent more damage by not using a credit card then I think they are being as smart as they could be in the situation.

    But that’s just one example. Paying for things like regular meals or vacation expenses does not make sense. Things that are not impulse decisions should end up on a credit card because you should have planned ahead for being able to afford them.

    I like how you handled the situation, friends are more important than money, and I’m glad you mentioned that you changed your card number. If you didn’t change your card number then if it happened again then you would be the one to blame.

  9. says

    Agree wholeheartedly with this. Credit cards are a great tool. The main reason they want to help and protect you is to make more money by having you keep using their card, but might as well use it anyway. Great example of the protections a credit card offers.

  10. Steve says

    Sam, will you be my friend?

    P.S. My wife, child and I ate BRUNCH today and spent $130. Preposterous! I vastly prefer our $28 greasy spoon breakfasts. Brunch is the ultimate ‘tweener meal. I loathe BRUNCH. But….sometimes one has to YES DEAR to keep the marriage rockin’. Sigh.

  11. says

    Can not agree more to it. In the US, the credit cards give such big benefits. Discover provides 90 day price match guarantee, 90 days return guarantee & full refund if the product is stolen within 90 days – They are almost insuring the product & that also free of cost :-)

    Also Discover makes it so easy to file a dispute. I love Discover!!!

  12. Wayne says

    I’m amazed that you don’t seem to have a problem with the issue that the restaurant is out almost $500! Yes, the waiter should not have accepted the card number, but why should your friend get to skate away and let the restaurant take the hit? He stole that meal by fraudulently using your number. Don’t you feel any moral obligation to help make the establishment whole again? After all, you are partly responsible for giving out your card number for your friend to use in the first place.

    • says

      Even though the restaurant violated the law and betrayed a consumer’s trust (imagine if everybody knew they accept anybody’s credit card), I guess I should feel sorry they are out a couple hundred bucks as you say (high margin establishment).

      I should be responsible for my friend’s every move too since I gave him my card a year before the incident.

      And even after I wrote that my friend went in to pay cash, you are right that his actions are my fault and I should know better. Thank you for your perspective.

      In the post;

      “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.”

    • says

      The restaurant let someone pay with a credit card number written on a piece of paper, without even verifying that the card belonged to the person who paid! As far as I’m concerned, it’s their fault as much as the friend who fraudulently used the card. They should eat it.

  13. says

    You are a nicer person than me. I would’ve never spoken to that so-called “friend” again!

    I love using credit cards for the reasons you’ve mentioned. We got trapped in Jamaica for two additional days this winter, and our credit card travel insurance picked up the bill for two additional nights at the resort and a few meals.

  14. JNEW says

    Sam:

    Like you, I would not make a stink and I would not press charges…… but I would be writing this friend off my list.

    To me, that just crosses the line. A true friend would not do that.

    If he was sorry– the check he promised would have arrived.

    I think that it is more than immaturity as you implied. This guy is going to keep crossing lines
    until he finds himself sharing cell with Mr. Madoff.

  15. S says

    The story you give should answer the first line of this post. Many people cannot be trusted with a credit card. Not to the point where they are being fraudulent like your friend, but to the point that apparently got your friend in trouble. For people like him, and there are probably many, the dangers of a credit card likely far outweigh any potential benefits. For others who are more responsible, credit cards may provide a benefit. However, though I use one for similar reasons to you and pay it off every month, I’m quite sure that I spend more than I otherwise would if I didn’t have a credit card and was forced to pay cash for everything.

    • says

      Yes, good point. My story’s intention is to tie things back to the intro. So I guess if folks do encounter people who don’t use credit cards, then one must therefore presume, rightly or wrongly, they have a spending or financial problem.

  16. says

    I also think using a credit card (responsibly) is safer, especially more so than a debit card. Recently there was a story on the news about how a local Del Taco’s credit card swiper was adding an extra zero onto every order. A few people who used their debit cards had their bank accounts wiped out. Had they used a credit card instead, they could have quickly disputed the charge with their credit card company – and still have the cash in the bank! With a bank, it’s harder to have money refunded to your bank account.

  17. SavvyFinancialLatina says

    I have had credit cards dispute charges for me. You are right, it’s great. I love the protection and the rewards. We pay off our credit cards every month.

  18. says

    I never get why people spend with debit cards today! If you’re still using a debit Visa/MC, you might as well pay with a real credit card. The credit card protection laws in the US do not apply to bank-run Visa/MC debit cards! So when someone gets your debit card number and clears out your checking, you’re without that cash for as many days as your bank decides to take to reimburse you–and depending on bank policy, you still may be on the hook for a portion of the overdraft. But if the fraudulent transaction was a traditional credit card, like your experience shows, you don’t have to worry about paying the charges whatsoever.

    If you use cash only, that’s one thing. But if you’re using the plastic Visa/MC debit card, switch to a real credit card. Get a small balance limit if you’re paranoid about overspending, or set alerts on the credit card to email you when you hit a certain spending threshold. Then pay that balance in full every month and you get access to great credit card rewards in the process!

    The only time I use my debit card now is to take out cash from the atm. :)

  19. Max says

    Perhaps you could consider the “help” that you are giving your friend. If he truly has a problem with finances and credit, giving him access to your card in his definition of “times of trouble” may not really be helping anyone.

    Some times the most loving thing someone can do for another is to let them fall; allow them to feel the full extent of the consequences of their actions.

    Having empathy and wanting to help others is very noble, however how we help others has to be carefully considered.

  20. says

    I hear you! It baffles me how many people shun credit cards when they can be such excellent tools. The best experience I have had was signing up for the Amazon rewards card. I don’t pay any maintenance fees for having one and I get bonuses when it’s used online. I set up all my monthly bills – things I debt it anyway – and pay the bills off immediately. Just about each quarter I have enough points on Amazon to get myself a cool book or two and a gift for a family member, plus free shipping. It’s awesome!

  21. says

    I love the perspective you have, Sam. I, too, have made a lifetime of foolish and destructive mistakes — best to remember that when one of our loved ones does the same.

  22. says

    Wow, that’s quite a story. You’re a better friend than I. I never would have let someone use my card, and I definitely wouldn’t have remained so calm about my friend using the card without my permission if I had let them use it in the past!

    I use a credit card for 99.9% of the purchases I make. Mainly for the rewards points, but the ability to easily dispute charges doesn’t go overlooked. I lost my card before and had someone ring up a few charges on it before I was able to cancel it. One phone call took care of it all and I wasn’t liable for any of the charges I didn’t make.

    • says

      It’s because I knew with high certainty I would get all my money back that I wasn’t sweating the situation. Peace of mind using a credit card is the thesis of this post. I’ve got a big financial company to do battles for me as soon as I call something in. Sometimes, they’ll catch things for me.

  23. says

    Another benefit of using a cc is that it makes it easier to track your personal finances. Instead of 100 different transactions to enter into your accounting software, you just have the one credit card payment per month. Can easily see that your average monthly spending is $1,000 or $2,000 or whatever.

    I do 99.9% of all spending on CC. So my personal expenses are simplified to 12 transactions for the year. I use my debit card as a credit card for business purchases. That way they get listed as separate transactions instead of one monthly payment. Business expenses should be categorized for deductions while it is not necessary for personal unless you really need the extra detail.

  24. AC says

    Maybe I do not know the card agreement of your credit card but I thought “No One Else” can use your credit card (with your name on it) other than yourself. In this case, as soon as your friend “borrow” your card, you are liable (at least partially) for whatever he is going to do with the card (or the info on the card). Maybe? Any lawyers here? Just curious.

    On the side, I am a big fan of CCs as I used to get a lot of miles by open/close many airline cards. Too bad, they changed their rules (because 2008!) so I can no longer keep opening the same card and get the new card bonus miles.

    • says

      With permission, another can use your credit card. (signed faxed statement with card info for the restaurant example).

      Or when a princess uses her rich daddy’s credit card to go shopping, is another example.

  25. says

    One thing that always gets mentioned with credit cards is there fraud protection, well anyone with a Visa/Mastercard logo has that same fraud protection with your debit card. The bank will file what’s called a Reg E claim, and like the credit card will do an investigation on the transaction.

    I believe credit cards should be treated like alcohol. If you are a recovering alcoholic you shouldn’t even own a credit card. Since I’m in recovery from credit cards, I refuse to use them, saves me from everything bad.

  26. Rahul says

    So true and awesome job and time spent publicizing this very fact!

    From the last almost decade I’ve been using credit cards, I have not only saved a lot of money otherwise spent on interests through balance transfers but also gained a lot by earning 2% cash back on all my purchases.

    In good old days, when the banks used to pay a lot money on deposits, I regularly used to borrow from Credit card companies at 0% (and of course repay it on time). Also, I must have earned at least $ 5000 + back from my then Charles Schwab 2% cash rewards card and now American Express Fidelity 2% back towards 529 plan.

    All this after the fact that you get Travel Insurance, ability to dispute transactions, never needing to carry physical cash and other services.

    All you need to do is play your part well – repay on time, and keep a track of your expenditure. Why wouldn’t anybody want to use it?

  27. says

    “…you get fraud and conflict protection.” Visa also has fraud protection for a debit card when you sign for a purchase (do not use your PIN). Our spending rate dropped and our saving rate skyrocketed when we switched to using cash and a debit card. The savings we created from not spending was equivalent to any reward points we would get.

  28. says

    I use credit cards 100% of the time! So much happens nowadays with credit/debit cards, I like the safety of removing erroneous charges. A fe w years ago, I mistakenly bought fake Adidas running shoes. Visa not only refunded my charge, but reimbursed me for (postage) returning the shoes.

      • says

        It was online, but I thought it was authentic. The old axiom is still true, “if it is too good to be true, it probably isn’t.” The price was pretty good. $110 Adidas shoes for $78 delivered!Their website looked just like the real Adidas site. Afterward, I even reported it to Adidas. My first clue was the shoes were drop shipped from China. When I saw them, there were obvious things wrong. The only positive part of the experience was Visa who resolved the problem.

  29. Jay says

    Sam, you are more forgiving now because you have the money.

    Imagine that you just started out and trying to save every penny.

    • says

      Jay, you are probably right. Having money allows you to not worry about money as much. You still worry, but you don’t let things like this bend you out of shape. I’m really more interested in learning how this could have happened and sharing the story.

      The crazier the situation, the better actually!

  30. Mike L says

    Like the story…love your blog.

    When traveling abroad, I always carry 2 credit cards with ‘zero’ foreign transaction fees and 1 debit card with no fees (1 of the 3 cards should have a smart chip tech on it). This gives me a whole lot of ‘piece of mind’ as it covers most financial needs and situations.

    - minimize cash on hand
    - no fees
    - protection w/ CCs
    - backup in case one card or another is not accepted

  31. says

    Wow, that’s quite a story!

    At least your friend had the integrity to go back and pay the bill, even after they took off the charge.

    My wife and I have had our fair share of random fraudulent charges, but the card companies always take care of them quickly. It seems like I have actually had the most trouble with my BofA debit card.

    As far as credit cards, I think they can be great. My wife and I use them and pay them off monthly. I always tell people that credit cards are fine as long as you are responsible, but if you fail to pay them off monthly and continue to have issues with them, cancel them all immediately. I have seen the worst cases of people spending there way to bankruptcy, but for most, there is no reason not to use them.

  32. says

    I have had credit cards ever since I got out of college in 1985, and have never had any trouble with them. I am happy for the protections they provide that you talked about. My wife has had her card skimmed and fraudulently used two times. The first time, the thieves bought stuff with a fake card until they maxed the balance. It didn’t cost us anything. We just had to fill out an affidavit stating that the charges were not ours, and that was the last we ever heard of it. We were issued new cards. The second time, I caught the fraudulent charges just as they started to happen and immediately called the credit card company. They cancelled the cards, sent us new ones, and had us fill out another affidavit. No problems.

    It’s for things like fraudulent charges that I never want an ATM debit charge card. We have just plain old ATM cards. If you have your debit card skimmed, the thieves can drain your account before you know it. Yes, the bank will pay you back, but in the interim, your bank account is empty. Hopefully, no one tries to cash an outstanding check against the account, or you will have to pay an overcharge fee. My wife and I treat our credit cards like debit cards and do not charge more than what is in our bank account. We always pay the cards off in full every month.

  33. says

    First off, I’m free any day of the week for a champagne brunch in LA, I’ll even pick you up from the airport :)

    You know how I love credit cards so this post is right up my alley. I get legitimately pissed when I can’t pay with credit, it’s more convenient, gets you cash back, sign up bonuses, etc. I NEVER pay with cash unless I have to. That’s one of the reasons why I love Uber/Lyft actually(I’m now a Lyft driver btw) since paying taxis in cash always made me mad for whatever reason.

    I don’t baby people either so if you’re dumb enough to spend more on a credit card than you have in your bank account that’s your problem not mine. I hate these little disclosures I see everywhere that say, “Only sign up for this card if you are responsible with your credit.” We’re all adults here…come on now.

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