DougA
Upstate NY
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Joined: 04/17/2020
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Lantley wrote:Granted it limits your exposure. but sooner or later the credit card needs to be paid. You either pay with a check or direct transfer on line.
There is no free lunch. You end up giving access to your bank account.
Actually. No. For multiple reasons.
First, paying with a credit card insulates your bank account and its data from fraud because you are not giving anyone your critical bank account data.
Secondly, NOBODY but your own bank has access to your individual bank account data when it pays your credit card. The bank that holds your bank account is the paying bank. It makes a bulk transaction to the credit card issuing bank each day, not just for you, but for you and many others. Your account at the credit card issuing bank is credited from the bulk transaction account at your paying bank, which is debited and credited from your individual bank account. In fact the debit from your account occurs as the bulk transaction account is credited. The credit card holding bank is usually paid within 24 hours of the deduction from your account. Your bank account data never leaves the bank you hold your account in. This is especially true if your bank and credit card issuer are one and the same.
In my case I pay the credit card bill each month with one transfer from my Navy Federal Credit Union checking to my Navy Federal Visa. All outside transactions are securely handled by the credit card and are better protected legally than would be my bank account and main assets. Using the credit card effectively firewalls my bank account from anyone.
Doug & Patti & Puppy Leo
From Upstate New York
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Lantley
Ellicott City, Maryland
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Joined: 08/23/2005
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DougA wrote:Lantley wrote:Granted it limits your exposure. but sooner or later the credit card needs to be paid. You either pay with a check or direct transfer on line.
There is no free lunch. You end up giving access to your bank account.
Actually. No. For multiple reasons.
First, paying with a credit card insulates your bank account and its data from fraud because you are not giving anyone your critical bank account data.
Secondly, NOBODY but your own bank has access to your individual bank account data when it pays your credit card. The bank that holds your bank account is the paying bank. It makes a bulk transaction to the credit card issuing bank each day, not just for you, but for you and many others. Your account at the credit card issuing bank is credited from the bulk transaction account at your paying bank, which is debited and credited from your individual bank account. In fact the debit from your account occurs as the bulk transaction account is credited. The credit card holding bank is usually paid within 24 hours of the deduction from your account. Your bank account data never leaves the bank you hold your account in. This is especially true if your bank and credit card issuer are one and the same.
In my case I pay the credit card bill each month with one transfer from my Navy Federal Credit Union checking to my Navy Federal Visa. All outside transactions are securely handled by the credit card and are better protected legally than would be my bank account and main assets. Using the credit card effectively firewalls my bank account from anyone.
That's kind of the fallacy if you have an account and transfer money electronically there will always be a risk. Using terms like firewall may make you feel better but the risk exist.
The FDIC has been around long before all the digital transactions we currently make. Bank fraud/theft is not a new phenomenon. None of it is foolproof.
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DougA
Upstate NY
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Joined: 04/17/2020
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Lantley wrote:DougA wrote:Lantley wrote:Granted it limits your exposure. but sooner or later the credit card needs to be paid. You either pay with a check or direct transfer on line.
There is no free lunch. You end up giving access to your bank account.
Actually. No. For multiple reasons.
First, paying with a credit card insulates your bank account and its data from fraud because you are not giving anyone your critical bank account data.
Secondly, NOBODY but your own bank has access to your individual bank account data when it pays your credit card. The bank that holds your bank account is the paying bank. It makes a bulk transaction to the credit card issuing bank each day, not just for you, but for you and many others. Your account at the credit card issuing bank is credited from the bulk transaction account at your paying bank, which is debited and credited from your individual bank account. In fact the debit from your account occurs as the bulk transaction account is credited. The credit card holding bank is usually paid within 24 hours of the deduction from your account. Your bank account data never leaves the bank you hold your account in. This is especially true if your bank and credit card issuer are one and the same.
In my case I pay the credit card bill each month with one transfer from my Navy Federal Credit Union checking to my Navy Federal Visa. All outside transactions are securely handled by the credit card and are better protected legally than would be my bank account and main assets. Using the credit card effectively firewalls my bank account from anyone.
That's kind of the fallacy if you have an account and transfer money electronically there will always be a risk. Using terms like firewall may make you feel better but the risk exist.
The FDIC has been around long before all the digital transactions we currently make. Bank fraud/theft is not a new phenomenon. None of it is foolproof.
Look, this is my last post on this subject, and I will explain why.
There is no foolproof payment system. None. Nada. However, the entire financial industry, the banks and their regulators, consumer protection organizations, all etc, etc, agree that using a credit card (instead of a debit card or giving someone your bank account data in any form) is far, far, far less risky for the consumer than using a debit card or giving someone your bank account data thru either electronic transfer or handing them a personal check.
This is something I know and care about. I worked in financial risk management for a very large organization for 30+ years. I retired as Director for Strategic Planning and Risk Management. When I started 40 years ago all procurements were done with paper using purchase orders, checks, invoices, petty cash and cashboxes etc. Fraud prevention was expensive and difficult. As we moved to electronic checks for large purchases and debit cards for small purchases, fraud and improper payments declined, but getting vendors paid with debit cards to make refunds for defective goods and improper payments took months of follow-up staff work. When we moved to credit cards for small procurements under $25,000 the dispute process changed. When one of our card holders disputed a charge, the refund came within 24 hours and the burden of proof shifted from card holder to the supplier.
For me, debit cards should be used only by:
1. those who can't get credit,
2. when your credit card won't work, AND
3. when the vendor refuses to take cash.
That is how risky I consider them.
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NamMedevac 70
Reno
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Joined: 11/09/2020
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I am required to make an online monthly payment by either credit card or direct bank draw from my bank account that is much less expensive than using the CC with a "convenience charge of $52.00 each month. So I have a separate bank checking account with limited funds in it for the monthly draw. Therefore, I am limited to a small amount of loss if the merchant or someone else decides to steal from my bank account. Cheers from the casino.
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