It was one of the tools that allowed me to maintain healthy credit card usage habits. In my idle time when messing around on my phone I’d gotten into the habit of just transferring money from my checking account to my credit card, often in excess of my actual balance, so as to cover “pending” purchases.
Not only will my bank no longer let me do that, just to twist the knife a bit, they will let me make multiple payments totaling the pending total due so long as no individual payment exceeds my actual balance.
So it’s not that they can no longer handle negative balances on the card, it’s just that they’ve half-ass made the interface disallow it.
Debit cards usually don’t offer cashback, perks, or robust fraud protections, and do nothing for your credit score. That last one is the important bit. I used to use my debit card exclusively, and could never get approved for any kind of loan. Once I started using credit cards the way I described in my other comment, my credit score jumped waaaaaay up and I started getting approved for everything.
My debit card gives me a better interest rate on checking and savings which is way better than points or cash back. The only difference in fraud protection is the money may not be immediately available that was fraudulent, which can be a problem. Credit can be a problem until you get a mortgage though without credit cards.
Keep the money in your bank account with interest, then pay the credit card in full every month. You get both benefits.
The rate depends on debit card use.
To be fair, high yield checking accounts sometimes require you to actually use the debit card
Oh sure, you get up votes when you say it
So it sounds like the solution to increasing the score tracking how good you are at paying bills when they are due is to pay bills when they are due?
I pay my bills on time every month. That’s only one factor for your credit score. Another big part of your score is credit utilization, or the amount of credit you use vs. how much credit you have available to you. So paying off my cards the way I described is how I keep my usage percentage at a minimum. I’ve seen big increases to my score since I started paying closer attention to that factor.
My checking account pays excellent interest, but my monthly cashback from my credit cards is always more.
I’m curious why you seem so opposed to some people choosing to use their credit cards this way? Your implication by bringing up debit cards and due dates is that we’re somehow not being responsible with our money, but that’s just not the case. I’m not attacking you, just curious why it seems to bug you?
What I’m seeing in this post is that people want a good score that is supposed to reflect their ability to pay bills on time without explicitly paying bills on time. Simple tracking one’s spending and paying off credit card statements and they come in is a great way to build credit, but it does require a minimal amount of fiscal responsibility in the form of tracking one’s own spending habits over the course of a single month.
I get what you’re saying, but paying a bill before its due date is still paying that bill on time. I also keep track of my spending habits, and am completely on top of and in control of my finances. I just also choose to pay my credit card balance as I go.
Allow me to further attempt to better communicate the key points in the timeline.
The time of purchase is well before the statement date, which precedes the due date.
ToP --- SD --- DDThe “expected” behavior is to pay the statement balance between the statement date and the due date.