NerdWallet and NASDAQ on the Wise Use of Credit Cards

Wise Use of Credit Cards: Introduction

We often hear that too much use of credit cards — as opposed to debit card use — is a sign of household budgetary woes, and eventual drowning under unmanageable interest in wise use of credit cards.

The NerdWallet Perspective

In times of economic hardship, it’s true that credit cards often serve as a means to “borrow money.” However, two recent articles, one from NerdWallet and another from NASDAQ, present a different perspective this week. They advocate for both frequent and wise use of credit cards. The goal here isn’t to accumulate debt. Instead, it’s to harness the rewards and improve household money management.

NerdWallet’s Insights

At NerdWallet, columnist Sean McQuay opines that “I Always Pay With a Credit Card, and You Should Too.”   Among his primary reasons are that “credit cards, which are accepted just about everywhere these days, offer:

• Ways to earn big rewards with every purchase.
• A means of floating debt for more than a month — or longer — interest-free.
• Zero liability for fraudulent purchases.”

And he points out, while “Credit cards and debit cards look the same… they handle fraud differently. Suppose your debit card numbers were skimmed when you paid at the self-serve gas station. Even if you noticed the theft right away, the funds would still be missing from your checking account until the bank got around to reimbursing you. That could be weeks later. Should you fail to identify any unauthorized transactions on your account until after two months, the bank is under no obligation to provide any reimbursement.

But aside from initially more secure protection against skimming or fraud, McQuay lists lots of other reasons, like cash-back offers and travel rewards, depending on the card.

The NASDAQ Perspective

NASDAQ continues those themes with its own piece on “How to Save With Credit Cards Beyond Points and Miles.” Delving into the debate on debit versus credit protections, the article explains: “Federal law dictates that reporting unauthorized charges within two business days of your debit card being lost or stolen ensures minimal costs to you. However, any delay could make you liable for up to $500. In contrast, with credit cards, most issuers will eliminate disputed charges provided you report them within 60 days. By law, you’re not accountable for more than $50 of the total fraudulent purchases.”

But they also cite additional perqs, including trip insurance (which is often applicable to rental cars), as well as price and purchase protection — all depending on the card, of course.

McQuay’s Advice

But McQuay, again, stresses that it’s not about going into debt: “When you’re spending what you normally would, credit cards get you something extra in return. Until your debit cards and cash can do the same, credit is the better choice.”

Conclusion

Of course, sometimes there are reasons to just use debit, and spend what you have, but either way, your business needs to be ready to take payment cards, online and off, with EMV protection in your store or kiosk, so that customers won’t need to deploy those “fraud protections” after all.

And with summer here, and more travel afoot, customers will be saying “charge it” more often. So let one of those “benefits” be to your business — more sales, with the added convenience.

AVPS Can Help

We’ll be here “All Summer Long.” And beyond.