Interest Rates on Credit Cards

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littlemiss63
Posts: 2516
Joined: Thu Aug 27, 2015 10:11 pm
Location: Middle Tennessee

Re: Interest Rates on Credit Cards

Post by littlemiss63 »

ohjodi wrote: Wed Feb 20, 2019 6:27 pm American Express has many credit cards, in addition to the charge cards.
I think it's a good idea to have a couple of cards, even tho you might not use them on a regular basis. It is very difficult to buy an airline ticket if you don't have one and to reserve a hotel room. Of course, you could use a debit card I suppose, but I do like the fact that your credit card will take care of any unauthorized charges on the card. Debit cards have no protection at all.

Florida, that is interesting about the car insurance on rental cars, I've never knew that, but my insurance covers rental cars so I haven't had a need to use it.
ohjodi
Posts: 1444
Joined: Sun Aug 30, 2015 3:57 pm

Re: Interest Rates on Credit Cards

Post by ohjodi »

littlemiss63 wrote: Wed Feb 20, 2019 9:06 pm I think it's a good idea to have a couple of cards, even tho you might not use them on a regular basis. It is very difficult to buy an airline ticket if you don't have one and to reserve a hotel room. Of course, you could use a debit card I suppose, but I do like the fact that your credit card will take care of any unauthorized charges on the card. Debit cards have no protection at all.

Florida, that is interesting about the car insurance on rental cars, I've never knew that, but my insurance covers rental cars so I haven't had a need to use it.
Hotels are terrible about debit cards. Let's say you reserve a hotel room for a night or two......the hotel will put a hold on your debit card for not only the amount of the room, but for an ADDITIONAL amount to cover any other charges you MIGHT have, like for room service, damages, etc.

So they "hold" that amount, let's say $250, from your checking balance....so you need to have that money in your account when you make the reservation. Then, after you stay, and check out of the hotel, they complete the transaction for that $200 (room only, no damages) and finally take it from your checking account.

But what OFTEN, OFTEN happens, is not only do they take that $200......but they don't immediately also release the original $250 hold on your account. It can take a couple of days, and phone calls to your bank to get it taken care of.

So, let's say yuo have $300 in your checking, you make the reservation, and the hotel puts a hold on the $250. Your available balance in your checking is now only $50, even though you''re not going to the hotel for days or weeks from now.

You then check out of your hotel, the hotel takes $200, but does not release the first hold. They took $200 from your $50 available balance. Your new available balance is -$150. Your bank will have to help straighten out any overdrafts that might have happened because of this. While they may waive overdraft charges...........the real problem is when you're driving home from your hotel stay and can't buy gas or dinner because your account appears to be -$150, instead of the +$100 you really have.

While debit cards have an opt-in/opt-out choice on whether you allow your debit card to keep working even if your balance is negative, this is an extraordinary headache tho have to try and straighten this out.

On a credit card, it doesn't really matter. It will straighten out in a few days, and the final charge is the $200. Your money isn't trapped by a hold.
ohjodi
littlemiss63
Posts: 2516
Joined: Thu Aug 27, 2015 10:11 pm
Location: Middle Tennessee

Re: Interest Rates on Credit Cards

Post by littlemiss63 »

ohjodi wrote: Wed Feb 20, 2019 11:01 pm Hotels are terrible about debit cards. Let's say you reserve a hotel room for a night or two......the hotel will put a hold on your debit card for not only the amount of the room, but for an ADDITIONAL amount to cover any other charges you MIGHT have, like for room service, damages, etc.

So they "hold" that amount, let's say $250, from your checking balance....so you need to have that money in your account when you make the reservation. Then, after you stay, and check out of the hotel, they complete the transaction for that $200 (room only, no damages) and finally take it from your checking account.

But what OFTEN, OFTEN happens, is not only do they take that $200......but they don't immediately also release the original $250 hold on your account. It can take a couple of days, and phone calls to your bank to get it taken care of.

So, let's say yuo have $300 in your checking, you make the reservation, and the hotel puts a hold on the $250. Your available balance in your checking is now only $50, even though you''re not going to the hotel for days or weeks from now.

You then check out of your hotel, the hotel takes $200, but does not release the first hold. They took $200 from your $50 available balance. Your new available balance is -$150. Your bank will have to help straighten out any overdrafts that might have happened because of this. While they may waive overdraft charges...........the real problem is when you're driving home from your hotel stay and can't buy gas or dinner because your account appears to be -$150, instead of the +$100 you really have.

While debit cards have an opt-in/opt-out choice on whether you allow your debit card to keep working even if your balance is negative, this is an extraordinary headache tho have to try and straighten this out.

On a credit card, it doesn't really matter. It will straighten out in a few days, and the final charge is the $200. Your money isn't trapped by a hold.
Good information to know about the debit card. I am not a fan of the debit card at all.
ohjodi
Posts: 1444
Joined: Sun Aug 30, 2015 3:57 pm

Re: Interest Rates on Credit Cards

Post by ohjodi »

Ok, sorry but here's another of Ohjodi's essays about credit cards, LOL

My two sisters, and their families, and I live in Illinois. Next month they're driving to Northern Wisconsin (in MARCH!) for a cousin's wedding. Lots of snow and bad weather. A lot can go wrong :-|

One sister doesn't have a credit card. The other has one with only $500 or so available on it. They needed to reserve two hotel rooms, for three nights, and I convinced them to use one of my credit cards to hold the reservations (as I mentioned about holds in an earlier post).

I'm giving each sister a credit card of mine for the trip. One Visa, one MasterCard. I called the CC Banks to authorize each sister on a card. The balances are zero, and the interest is high, 18%. But with these cards they will be able to handle any kind of emergency. Car problems, weather problems and they need to stay another day, their own possible credit card or debit card problems and holds, bank errors, etc, etc.

Anything they put on the card they will be able to pay it either right away, or within a month or two at worst. If they charge $500 and take two months to pay it, 18% is just $7.50 per month.

That's a really small price to pay for peace of mind.

And that they won't have to call me asking me what to do because they're stuck somewhere and their cards don't work is a huge bonus to me, LOL

So, always have a credit card on hand, even if it's high interest.
ohjodi
Dgflorida
Posts: 4381
Joined: Wed Oct 07, 2015 8:10 pm

Re: Interest Rates on Credit Cards

Post by Dgflorida »

Thanks for the detailed information ohjodi. Absolutely fits with my experience. One little tweak and the reason I get the additional car rental insurance. While your insurance will pay for damages and your credit card can help(depending on the card rules) the trick the car rental places use is "time out of service charges" So while your insurance will pay for the damage, you will be on the hook for time out of service on the car and why would they hurry to get the car repaired when they are making money off you while it sits?
Dgflorida
Posts: 4381
Joined: Wed Oct 07, 2015 8:10 pm

Re: Interest Rates on Credit Cards

Post by Dgflorida »

I also agree with you ohjodi regarding having more than one credit card. I have 2. I have one with a large spending limit and one with a smaller one. I get better points with the large one and use it for most everything at home. However, I travel with the smaller one. Since most of my trip is pre-paid with the larger one sitting at home, I don't have anything but what I spend on the trip on the smaller one. Sometimes, a hotel will mess up that plan, but usually it works out. Occasionally, I will find myself in a situation where a place will not accept credit cards, so I carry one blank check. Since I do not generally travel alone, we have several to work with between the group.
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