WEBVTT - Cash, Debit, or Credit? #149 0:00:00.040 --> 0:00:03.040 Welcome to How the Money. I'm Joel and I and Matt. 0:00:03.360 --> 0:00:26.040 Today we're discussing cash, debit or credit Joel Man, this 0:00:26.120 --> 0:00:28.000 is sort of one of those age old questions. It's 0:00:28.000 --> 0:00:29.600 like paper or plastics. You know, you're like at the 0:00:29.600 --> 0:00:31.960 grocery store, they're going to ask you what kind of 0:00:32.000 --> 0:00:33.800 bag you want to use? This is the question that 0:00:33.800 --> 0:00:36.159 we ask ourselves, whether we realize it or not. This 0:00:36.200 --> 0:00:38.120 is the choice that we make pretty much every day 0:00:38.159 --> 0:00:40.640 of our lives when we make purchases. So yeah, we're 0:00:40.680 --> 0:00:42.720 not always actively thinking about it. Oh I think I'm 0:00:42.720 --> 0:00:46.120 gonna use this form of purchasing today, but it is 0:00:46.159 --> 0:00:48.360 something that we have to think about. And there are 0:00:48.560 --> 0:00:51.199 different benefits, different pitfalls to each one, and so we 0:00:51.240 --> 0:00:53.920 have to discuss those and I think hopefully people at 0:00:53.960 --> 0:00:56.120 the end of this will have a better idea of 0:00:56.280 --> 0:00:59.240 how they should be making their purchases, whether it's with cash, 0:00:59.320 --> 0:01:02.280 debit or credit cards exactly. But before we get into that, Matt, 0:01:02.480 --> 0:01:04.880 I think we should talk quickly. You and I we 0:01:04.920 --> 0:01:08.320 had little dudes recently and they are a few months 0:01:08.360 --> 0:01:11.120 old now. It's been a fun time also a time 0:01:11.160 --> 0:01:13.920 of very little sleep. But one thing that we need 0:01:13.959 --> 0:01:17.080 to do. As you know, we have expanded our families, 0:01:17.440 --> 0:01:19.560 and that other people should think about as they go 0:01:19.640 --> 0:01:22.600 through big life changes. Is like kind of questioning how 0:01:22.720 --> 0:01:25.039 much life insurance you have and whether it's enough. We 0:01:25.120 --> 0:01:28.160 cover this topic quite a while back, but it's important 0:01:28.160 --> 0:01:31.120 to consider potentially laddering your life insurance. Let's say you 0:01:31.160 --> 0:01:34.480 already have a policy, but you feel like you need more. Well, 0:01:34.959 --> 0:01:37.720 when you have in addition to your family, that usually 0:01:37.760 --> 0:01:40.920 means increased costs, and that might mean a need for 0:01:41.080 --> 0:01:43.959 increased insurance coverage. And so I don't know about you, 0:01:44.120 --> 0:01:46.880 I'm revisiting the topic. I feel like actually probably already 0:01:46.880 --> 0:01:49.480 had too little to begin with, and so I'm planning 0:01:49.480 --> 0:01:51.880 on kind of shopping for another policy to kind of 0:01:51.960 --> 0:01:54.920 ladder so that my family has enough coverage in case 0:01:55.040 --> 0:01:59.120 the terrible, unfortunate event happens of me passing away early. 0:01:59.480 --> 0:02:02.360 Nice man, Yeah, this is an excellent time to revisit 0:02:02.440 --> 0:02:05.360 the kind of insurance that we have. And specifically, like 0:02:05.400 --> 0:02:09.120 you and I, we both have term life insurance. For me. Specifically, 0:02:09.120 --> 0:02:11.560 my policy is good until I'm fifty two years old, 0:02:11.800 --> 0:02:14.640 and so I'm hoping, you know, fingers crossed that by then, 0:02:15.360 --> 0:02:17.760 I might be financially independent. That actually might be an 0:02:17.760 --> 0:02:21.880 instance when a life insurance policy may not be as crucial, right, 0:02:21.919 --> 0:02:24.280 because if you're financially independent, you don't need your own 0:02:24.320 --> 0:02:26.919 source of income to provide income for your family where 0:02:26.919 --> 0:02:28.320 you did not be there. Yeah, and I wrote an 0:02:28.360 --> 0:02:29.960 article about this, it's on the website. Will link to 0:02:29.960 --> 0:02:32.400 it in the show notes. Specifically, the reason to buy 0:02:32.680 --> 0:02:35.600 term life insurance is for replacement of income, and so 0:02:35.680 --> 0:02:39.760 people oftentimes use it for other reasons that aren't necessary. 0:02:39.960 --> 0:02:42.960 And yes, in particular, if you're financially independent, you don't 0:02:43.240 --> 0:02:46.520 really need life insurance because you don't have income that 0:02:46.560 --> 0:02:49.839 needs replacing. But yeah, I think especially I just want 0:02:49.840 --> 0:02:51.880 people to think about this. As you know, we just 0:02:51.960 --> 0:02:55.440 had these life event changes. And I think any time 0:02:55.520 --> 0:02:58.560 you get married, you change jobs in your income is different, 0:02:58.960 --> 0:03:01.640 or you move even to a new house and the 0:03:01.720 --> 0:03:05.240 mortgage payments are higher, or you have another child, like 0:03:05.280 --> 0:03:06.799 these are the kind of events that you at least 0:03:06.840 --> 0:03:09.440 need to reassess. It doesn't necessarily mean you need more 0:03:09.760 --> 0:03:11.200 or you need to buy a new policy. And one 0:03:11.200 --> 0:03:13.560 other quick thing to mention too, is that if you 0:03:13.600 --> 0:03:16.640 have a policy through your employer, well in all likelihood, 0:03:17.160 --> 0:03:19.560 it's not enough. If you just went through open enrollment 0:03:19.600 --> 0:03:22.320 and you think that you're solid because your employer offers 0:03:22.360 --> 0:03:25.040 a certain amount of life insurance just straight up to 0:03:25.120 --> 0:03:27.440 you for free or for for a certain amount of money, 0:03:27.639 --> 0:03:30.680 well it's probably not enough coverage. Think about it, do 0:03:30.800 --> 0:03:33.400 the research, read that article, and make sure that you 0:03:33.480 --> 0:03:37.520 are properly insured, because that's really important. It's it's really 0:03:37.640 --> 0:03:39.920 cheap to write. Term life insurance is so dirt cheap 0:03:39.960 --> 0:03:42.360 now there's just not much of an excuse to avoid 0:03:42.360 --> 0:03:44.600 getting it. Well, that's the thing. It may not necessarily 0:03:44.600 --> 0:03:46.920 be cheap for us now because I mean, I'm ten 0:03:47.000 --> 0:03:49.120 years older than when I got my first policy, but 0:03:49.160 --> 0:03:51.960 when you're younger, it is it's very affordable. Term life 0:03:52.000 --> 0:03:53.880 is it's very affordable. It's something along the lines of 0:03:53.920 --> 0:03:56.960 thirty bucks a month. It does increase every year you 0:03:57.000 --> 0:03:59.680 get older. So I am very curious to see what 0:03:59.840 --> 0:04:01.200 the rates are going to be if I were to 0:04:01.240 --> 0:04:03.800 kind of attack on some additional coverage sort of in 0:04:03.800 --> 0:04:05.600 in our case, I think we'd be looking at layering 0:04:05.640 --> 0:04:08.720 instead of laddering more for the short term now when 0:04:08.800 --> 0:04:11.440 we would definitely need it. Um and you know, Another 0:04:11.480 --> 0:04:14.760 instance to consider beefing up your coverage is if your 0:04:14.760 --> 0:04:17.600 borderline cheap and not frugal, and if maybe skimmed out 0:04:17.600 --> 0:04:19.640 a little bit too much on the front end. You know, 0:04:19.680 --> 0:04:21.719 you kind of mentioned that. I think that's where we 0:04:21.760 --> 0:04:23.120 are with it now as well. And it's not that 0:04:23.160 --> 0:04:25.520 we were necessarily being cheap at the time. I didn't 0:04:25.520 --> 0:04:27.039 think I was being cheap when I as when you 0:04:27.080 --> 0:04:28.800 got it, you didn't have any kids exactly, We didn't, well, 0:04:28.800 --> 0:04:30.800 we didn't have any kids. We also, you know, we 0:04:30.880 --> 0:04:33.720 had one property at that point, we were pretty young. 0:04:33.760 --> 0:04:36.800 We didn't we had fewer expenses. Your circumstances have changed 0:04:36.800 --> 0:04:40.160 and changed another look, yeah, they have changed significantly. And 0:04:40.200 --> 0:04:41.479 so if that's the case for you, that you know, 0:04:41.520 --> 0:04:43.000 that's what you want to keep in mind, and you're 0:04:43.040 --> 0:04:44.960 looking at the different types of coverage out there. Yeah, 0:04:45.040 --> 0:04:47.040 I might have been a touch cheap, like it touched 0:04:47.080 --> 0:04:49.440 not not thinking about it as long term as I 0:04:49.480 --> 0:04:51.920 should have. And at the same time, also my circumstances 0:04:51.960 --> 0:04:54.080 have changed a good bit and so for both reasons, 0:04:54.360 --> 0:04:57.560 it's time to revisit. But okay, Matt, enough about life insurance. 0:04:57.720 --> 0:05:00.640 Love talking term life insurance. So cheap, so beautiful. But 0:05:00.680 --> 0:05:02.400 you know what else is beautiful with the label on 0:05:02.480 --> 0:05:06.200 this beer, we're checking Bourbon Barrel Orro Negro from Jackie 0:05:06.200 --> 0:05:09.200 O's our final beer that they sent us. And man, 0:05:09.279 --> 0:05:11.720 this one I'm really excited about having on the show today. 0:05:12.000 --> 0:05:13.520 And we'll give our thoughts on this one at the 0:05:13.560 --> 0:05:15.520 end of the episode and before we forget. If you 0:05:15.560 --> 0:05:18.640 happen to be anywhere near Athens, Ohio and you're into beer, 0:05:19.120 --> 0:05:22.120 you can't miss Jackie Os. Make sure you swing by there. Dude, 0:05:22.120 --> 0:05:25.039 I know that if we go anywhere near Ohio and 0:05:25.200 --> 0:05:28.280 the near future, we are totally going to spend like 0:05:28.320 --> 0:05:30.400 a few days. They're just hanging out with us. Guys. 0:05:30.480 --> 0:05:32.760 You I already know that this brewery is worth a 0:05:32.800 --> 0:05:35.480 long distance drive because the beers are so good and 0:05:35.520 --> 0:05:37.400 that people are so good there. All right, Matt, let's 0:05:37.440 --> 0:05:39.799 get onto the topic at hand. We're talking about cash, debit, 0:05:40.000 --> 0:05:44.000 or credit. It's important to consider how we pay. How 0:05:44.040 --> 0:05:47.040 we pay for things has a lot of implications for us. 0:05:47.480 --> 0:05:50.480 Some payment methods are more secure than others, Some provide 0:05:50.520 --> 0:05:53.280 better rewards peace of mind, or or might even cause 0:05:53.360 --> 0:05:56.400 us to spend less of our money. Are hard earned money. 0:05:56.440 --> 0:05:59.599 So how can we know whether we should be pulling 0:05:59.600 --> 0:06:02.000 out debit card or a credit card, or should we 0:06:02.040 --> 0:06:04.520 even stick to using cash. It's kind of old school, 0:06:04.520 --> 0:06:07.160 but that's how a lot of people roll right. Cash 0:06:07.160 --> 0:06:10.360 seems to help them stick to their spending plans. Well, 0:06:10.400 --> 0:06:12.480 we're going to discuss the pros and the cons and 0:06:12.520 --> 0:06:15.600 why how you pay is so important in this episode. Yeah, 0:06:15.680 --> 0:06:17.920 before we launch into you know that the cash, debit 0:06:18.000 --> 0:06:20.520 or credit debates. How about you know the different apps 0:06:20.520 --> 0:06:24.080 out there, right, the mobile payment platforms like zel or, 0:06:24.200 --> 0:06:27.440 Venmo and cash app. Those folks are blowing up, man. 0:06:27.520 --> 0:06:29.680 It is so easy to pay for goods and services 0:06:30.080 --> 0:06:32.599 and to just settle up with friends via those apps. 0:06:32.640 --> 0:06:36.559 I personally use Venomo, cash App and PayPal all the time. 0:06:36.680 --> 0:06:38.640 Like seriously on the rag and Joel, you know you 0:06:38.680 --> 0:06:41.599 mentioned the differing amounts of security, Like all these different apps. 0:06:41.600 --> 0:06:44.560 They use the highest level of encryption to ensure you 0:06:44.600 --> 0:06:46.840 know that their apps are secure, so your money doesn't 0:06:46.880 --> 0:06:49.560 just straight up and vanish, right. That is no fun 0:06:50.080 --> 0:06:52.200 vanishing money like that sucks, but at least you have 0:06:52.240 --> 0:06:55.520 a good story. Right. However, though, there are almost no 0:06:55.640 --> 0:06:59.000 protections for you if you make a user error if 0:06:59.000 --> 0:07:01.080 you send money to the wrong person. Right, So if 0:07:01.080 --> 0:07:03.360 you just send it to the wrong gym on the app, man, 0:07:03.400 --> 0:07:06.640 you are out of luck. I recently mentioned my Venomo 0:07:06.880 --> 0:07:10.160 mistake and that's exactly what happened to me. But luckily 0:07:10.320 --> 0:07:13.000 the person on the other end was kind enough to 0:07:13.080 --> 0:07:15.120 refund me. But here's the thing, if you are a 0:07:15.160 --> 0:07:19.840 recipient of some errant funds, don't immediately refund that money 0:07:19.880 --> 0:07:22.200 because there's a chance you might be, you know, the 0:07:22.240 --> 0:07:25.200 potential victim of some frauds. So you know, we would 0:07:25.200 --> 0:07:27.960 recommend for you to reach out to customer support of 0:07:28.080 --> 0:07:30.200 that specific app. You just want to make sure things 0:07:30.200 --> 0:07:32.400 around the up and up before you send money back 0:07:32.440 --> 0:07:35.480 their way. Yeah. I mean, the thing is with with 0:07:35.520 --> 0:07:37.720 those apps, it takes a couple of days for the 0:07:37.720 --> 0:07:39.680 money to actually go through. It looks like you just 0:07:39.720 --> 0:07:41.680 got the money, but it actually hasn't hit your account 0:07:41.680 --> 0:07:44.800 for a couple of days typically, and so because of that, 0:07:45.120 --> 0:07:47.160 the person that paid you the money could stop the 0:07:47.160 --> 0:07:49.640 payment with their bank, and that means you never actually 0:07:49.680 --> 0:07:51.280 got the money even though it looks like you did. 0:07:51.560 --> 0:07:53.800 So those apps are fantastic for a lot of reasons. 0:07:54.000 --> 0:07:56.920 They made things so much easier, especially settling up bills 0:07:56.920 --> 0:07:59.880 between friends, paying a landlord for your rent, or all 0:07:59.880 --> 0:08:03.040 these ways that these apps have just kind of really 0:08:03.080 --> 0:08:04.840 helped to make it easier for us to send money 0:08:04.880 --> 0:08:08.160 to each other. But be careful of paying the wrong person, 0:08:08.440 --> 0:08:11.960 or be careful if you mistakenly received funds to Matt, 0:08:12.000 --> 0:08:14.960 that's a good point, all right. Let's get into cash, debit, 0:08:15.000 --> 0:08:18.040 and credit in particular. Let's start with cash. Matt, it's 0:08:18.040 --> 0:08:20.280 so old school, man. People still use cash though, right. 0:08:20.320 --> 0:08:22.520 Do you carry cash in your wallet typically on like 0:08:22.560 --> 0:08:24.840 a daily basis. I always try to keep a twenty 0:08:24.880 --> 0:08:26.880 in there. I'm kind of an old school in that sense, 0:08:27.000 --> 0:08:28.920 you know, don't like Dad's always care around like it's 0:08:28.920 --> 0:08:31.160 twenty in your wallet just just in case for emergencies. Yeah, 0:08:31.160 --> 0:08:33.880 for sure, that's me. Yeah. I like to carry like 0:08:33.960 --> 0:08:36.040 a five and a few ones if you need a 0:08:36.080 --> 0:08:38.800 tip for something random or I don't know, just it's 0:08:38.880 --> 0:08:40.840 nice to have a few bucks on hand. But for 0:08:40.880 --> 0:08:44.720 the most part, man, I don't really use cash for 0:08:44.840 --> 0:08:47.240 It's kind of like that backup for me in my wallet, 0:08:47.240 --> 0:08:50.600 but it's not something I typically make purchases with. Ye 0:08:50.760 --> 0:08:53.720 back up only for sure. Yeah, because ultimately there aren't 0:08:53.720 --> 0:08:55.920 any rewards to be earned when we pay with cash 0:08:56.040 --> 0:08:59.920 unless a store offers a cash discount, which is also rare. 0:09:00.280 --> 0:09:03.640 So the biggest benefit though, of paying in cash is 0:09:03.640 --> 0:09:05.960 that you'll likely spend less. Study show that we have 0:09:05.960 --> 0:09:08.440 a harder time parting with physical currency than we do 0:09:08.640 --> 0:09:10.600 paying with plastic. It just kind of hurts a little 0:09:10.600 --> 0:09:13.079 more to actually open up your wality, your purse, pull 0:09:13.160 --> 0:09:15.560 the cash out and hand it over. There's just a 0:09:15.600 --> 0:09:19.200 feeling that we get that psychologically it means more to 0:09:19.320 --> 0:09:21.440 us than the swipe of the card. It almost feels 0:09:21.440 --> 0:09:23.120 like we're not actually spending money when we do that. 0:09:23.480 --> 0:09:27.839 So basically, the major upside of us actually using more 0:09:27.920 --> 0:09:29.800 cash in our lives to pay for things is a 0:09:29.840 --> 0:09:33.719 behavioral one. It's a behavior modification system of payment that 0:09:33.760 --> 0:09:36.520 forces us to think a little bit more before we 0:09:36.559 --> 0:09:39.240 actually go through with the purchase. So yeah, I think 0:09:39.280 --> 0:09:42.840 that is probably the biggest reason to actually pay with 0:09:42.880 --> 0:09:45.120 cash a little more often. Is that sort of double 0:09:45.120 --> 0:09:48.000 take that we have to do before we actually buy something. Yeah, 0:09:48.000 --> 0:09:50.960 and Joe, And another awesome benefit of only using cash 0:09:51.120 --> 0:09:53.160 is that it can help us to stick to a 0:09:53.160 --> 0:09:55.520 budget if you know, if you have a set amount 0:09:55.600 --> 0:09:58.440 of money that you've decided to spend on let's just 0:09:58.480 --> 0:10:01.880 say craft beer in our example, my favorite example, then 0:10:02.040 --> 0:10:04.320 once you run out of cash, guess what you are 0:10:04.440 --> 0:10:08.800 done spending money. This is especially helpful for discretionary purchases 0:10:08.880 --> 0:10:12.040 like going out for drinks, eating out, and even groceries. 0:10:12.160 --> 0:10:14.080 Right sometimes it can be tempting if we see some 0:10:14.120 --> 0:10:16.840 delicious looking fruit or veggies, maybe it's time to load up. 0:10:17.000 --> 0:10:19.920 Or ice cream bacon bacons on sale. Man, you buy 0:10:19.920 --> 0:10:22.320 that and freeze it. But paying in cash means that 0:10:22.360 --> 0:10:25.480 you only buy stuff that you can actually afford, and 0:10:25.559 --> 0:10:28.200 it also ensures that you won't pay interest on the 0:10:28.240 --> 0:10:30.960 items that you buy where you to buy those items 0:10:31.040 --> 0:10:34.559 on credit. But cash also has kind of an ugly downside. 0:10:35.080 --> 0:10:37.480 You could lose your wallet because you're carrying too much 0:10:37.520 --> 0:10:39.960 cash around, and that can be a bit nerve wracking. 0:10:40.160 --> 0:10:42.440 A lot of folks love the envelope system, kind of 0:10:42.480 --> 0:10:45.920 putting your money into envelopes for the specific line items 0:10:45.920 --> 0:10:48.360 in your budget, and then when you run out of cash, 0:10:48.679 --> 0:10:50.720 you run out of cash and you don't have any 0:10:50.720 --> 0:10:52.920 money left for the rest of the month. But I 0:10:52.960 --> 0:10:56.439 can't really imagine carrying around hundreds of dollars in cash myself, 0:10:56.520 --> 0:11:00.280 Matt to the grocery store wherever I'm going, and it 0:11:00.360 --> 0:11:02.800 just seems a little cumbersome, and also just having that 0:11:02.920 --> 0:11:06.240 much cash on your person. I just don't like that idea. So, really, 0:11:06.280 --> 0:11:08.679 if we're going to get practical with it, we purchased 0:11:08.720 --> 0:11:11.360 so many things online today that it makes it kind 0:11:11.360 --> 0:11:14.599 of impossible to use cash for a lot of those purchases. 0:11:14.760 --> 0:11:17.320 It's just not convenient, and so I think because of 0:11:17.360 --> 0:11:21.120 those reasons, using cash is helpful for a small segment 0:11:21.120 --> 0:11:24.920 of people, but isn't necessarily a great solution for most folks. Yeah, 0:11:24.920 --> 0:11:27.040 shopping online, man, I would love to know the actual 0:11:27.040 --> 0:11:30.320 percentage of Americans who do some form of shopping online. 0:11:30.360 --> 0:11:32.560 It's got to be huge, right, Oh, yeah, at least 0:11:32.559 --> 0:11:35.360 some form a huge percentage of us. A majority of 0:11:35.360 --> 0:11:38.440 our money is still overwhelmingly spent in retail stores, but 0:11:38.480 --> 0:11:41.440 it's shifting quickly. And so those folks who are typically 0:11:41.480 --> 0:11:43.960 using cash but do want to make online purchases, a 0:11:43.960 --> 0:11:46.720 lot of those folks are using debit cards because of 0:11:46.720 --> 0:11:49.840 that convenience, because they can actually make those purchases online. 0:11:49.960 --> 0:11:51.640 So we're gonna talk about debit cards and what we 0:11:51.760 --> 0:12:03.720 really think about them right after the break. All right, Matt, 0:12:03.960 --> 0:12:06.360 let's get into it. What do we really think of 0:12:06.400 --> 0:12:09.120 debit cards? Most people seem to kind of have a 0:12:09.160 --> 0:12:11.959 high view of debit cards. They're basically like credit cards. 0:12:12.120 --> 0:12:15.160 There's no real difference. So I feel more comfortable using 0:12:15.160 --> 0:12:17.520 my debit card. Why not? I think a lot of 0:12:17.640 --> 0:12:20.320 folks think that by using these debit cards they're gonna 0:12:20.400 --> 0:12:23.400 gain that convenience of paying in plastic and the ability 0:12:23.440 --> 0:12:25.920 to shop online, which is true. But folks think that 0:12:25.920 --> 0:12:28.480 with debit cards they have the same level of security 0:12:28.520 --> 0:12:32.000 that they have with credit cards, and this is not true, 0:12:32.320 --> 0:12:34.120 and that, in my mind, is the biggest reason why 0:12:34.160 --> 0:12:37.640 debit cards are not a great option for folks. Specifically, 0:12:37.640 --> 0:12:40.760 those protections that are offered to you when you pay 0:12:40.840 --> 0:12:43.320 with a credit card. There's so much better than the 0:12:43.360 --> 0:12:46.160 protections that you have when you pay with a debit card. Yeah. Man, 0:12:46.200 --> 0:12:48.680 if you don't report a fraudulent purchase with your debit 0:12:48.720 --> 0:12:51.080 card within two days of it occurring, you could be 0:12:51.120 --> 0:12:53.640 on the hook for up to fifty dollars right if 0:12:53.640 --> 0:12:56.320 you do happen to notice it within sixty days, you 0:12:56.320 --> 0:12:59.440 could be liable for up to five in charges. But 0:12:59.480 --> 0:13:02.480 if you don't noticed that fraud within sixty days or longer, 0:13:02.920 --> 0:13:05.679 you could lose all of your money. I can guarantee 0:13:05.720 --> 0:13:08.800 you that the protections that credit cards offer are much 0:13:08.880 --> 0:13:12.480 better than that. Yeah, Matt our friend Kenzie, she recently 0:13:12.559 --> 0:13:15.520 had her purse stolen and her debit card taken out 0:13:15.559 --> 0:13:17.320 and someone started using it as a way. I didn't 0:13:17.320 --> 0:13:18.760 know this, yeah, as if they were her she she 0:13:18.800 --> 0:13:21.680 posted in our Facebook group about it, and you know what, 0:13:21.800 --> 0:13:25.199 a debit card just doesn't have the same protections. Fortunately, 0:13:25.440 --> 0:13:28.360 she notified the bank immediately within that two day period. 0:13:28.600 --> 0:13:30.440 But if you didn't notice right away, and you didn't 0:13:30.480 --> 0:13:33.120 notify your bank, like you said, that timeline just kind 0:13:33.120 --> 0:13:36.160 of grows, and every day that you wait, basically, the 0:13:36.440 --> 0:13:38.400 more you can be on the hook for. And it's 0:13:38.440 --> 0:13:40.920 also money that's been taken out of your account that 0:13:40.920 --> 0:13:43.400 you're waiting to get refunded back to you. The money 0:13:43.520 --> 0:13:46.280 is gone for the time being. So when you use 0:13:46.320 --> 0:13:49.480 a credit card, you would be disputing in the case 0:13:49.480 --> 0:13:52.240 of fraud, for money that you would owe to the 0:13:52.240 --> 0:13:54.760 credit card company. But when someone racks up those charges 0:13:54.760 --> 0:13:56.880 on your debit card, that cash is gone and you 0:13:56.960 --> 0:13:59.400 have to fight to get it back, and so that 0:13:59.440 --> 0:14:02.400 can cause other issues while you're waiting for your bank 0:14:02.400 --> 0:14:04.839 to look into the situation and issue you a refund. 0:14:05.280 --> 0:14:08.000 Some banks will provide a provisional credit, but not all 0:14:08.040 --> 0:14:10.400 of them. They don't have to. They're not legally required to. 0:14:10.960 --> 0:14:14.080 You can always report your bank to the CFPB if 0:14:14.080 --> 0:14:16.480 they aren't treating you fairly, but it's just a crummy 0:14:16.520 --> 0:14:18.760 process to go through. And so, yeah, I think for 0:14:18.840 --> 0:14:22.360 these reasons, these protection reasons that are in place for 0:14:22.440 --> 0:14:25.240 debit card or credit card users, they're just stronger for 0:14:25.280 --> 0:14:27.560 credit card users, and because of that, it just makes 0:14:27.560 --> 0:14:30.000 debit cards just not nearly as good as an option 0:14:30.400 --> 0:14:33.320 for us to use. Yeah, man, they are certainly not 0:14:33.600 --> 0:14:36.080 great options. But here's the thing. By the same token, 0:14:36.480 --> 0:14:40.040 the same aspect of debit cards can actually help you 0:14:40.080 --> 0:14:42.800 to control your spending right. The fact that it is 0:14:42.960 --> 0:14:45.760 your actual money can help you. What is good about 0:14:45.760 --> 0:14:48.400 debit cards is that you are only accessing money that 0:14:48.440 --> 0:14:50.960 you actually have in your accounts, and that can be 0:14:51.000 --> 0:14:53.720 helpful if you tend to overspend and find yourself at 0:14:53.760 --> 0:14:55.560 the end of the building cycle owing more to your 0:14:55.600 --> 0:14:58.920 credit card than you actually have. While you can increase 0:14:59.600 --> 0:15:01.280 the limit on your credit card, you can't do that 0:15:01.320 --> 0:15:03.400 with your checking account that would be frowned upon by 0:15:03.400 --> 0:15:06.120 the bank you can do that, So in this way, 0:15:06.200 --> 0:15:09.200 debit cards are similar to cash. Once you've spent that money, 0:15:09.400 --> 0:15:12.000 you can't keep spending. You're done. Basically, what it comes 0:15:12.000 --> 0:15:13.520 down to with the debit card is that we should 0:15:13.640 --> 0:15:18.120 probably avoid them all together. Ultimately, the only debit card 0:15:18.200 --> 0:15:21.080 upside is the one you just mentioned, is that we 0:15:21.160 --> 0:15:24.240 can't spend more than we have, except for we kind 0:15:24.240 --> 0:15:27.560 of actually can at times if we allow our bank 0:15:27.920 --> 0:15:30.280 to give us the option of overdrafting our account, And 0:15:30.320 --> 0:15:32.600 if we do that, we're racking up exorbitant fees for 0:15:32.640 --> 0:15:35.320 the privilege of spending more money than we actually have, 0:15:35.720 --> 0:15:39.040 which is also a terrible idea, right exactly, So, even 0:15:39.080 --> 0:15:41.760 that one positive reason doesn't make it worth it to 0:15:41.840 --> 0:15:44.240 use debit cards. In our opinion, pretty much, the only 0:15:44.240 --> 0:15:46.440 time I'm pulling out my debit card these days is 0:15:46.440 --> 0:15:50.040 when I actually need to get cash for some random reason, 0:15:50.600 --> 0:15:53.480 which is very very rare. Yeah, you gotta replenish your 0:15:53.480 --> 0:15:55.480 stock of your one five dollar bill and your your 0:15:55.480 --> 0:15:56.960 three ones that you like to keep in your wallet 0:15:57.040 --> 0:15:59.720 eight dollars specifically at all times. I like to have 0:15:59.760 --> 0:16:01.840 it on And it's just a nice round number. It's 0:16:01.880 --> 0:16:03.400 kind of a random amount, right, When do you need 0:16:03.440 --> 0:16:05.520 more than that? Really? Though? Well there's four, you've got 0:16:05.520 --> 0:16:07.160 four bills. That's the thing for me. I just like 0:16:07.240 --> 0:16:09.800 having a singular bill, like just having a twenty in there. 0:16:10.000 --> 0:16:13.320 What if you gotta tip somebody though I don't tip, Okay, 0:16:13.440 --> 0:16:16.280 all right, all right, no, I'm kidding. This actually recently 0:16:16.320 --> 0:16:18.720 happened to us because here a quick story. Kate and 0:16:18.720 --> 0:16:21.360 I we were eating out and they took forever getting 0:16:21.360 --> 0:16:23.000 our food to us, and we didn't complain or anything, 0:16:23.280 --> 0:16:26.040 but our waiter just realized how long we were waiting, 0:16:26.120 --> 0:16:28.600 came over, explained to us the situation, said that dinner 0:16:28.680 --> 0:16:30.800 was gonna be taken care of, which was a huge tree. 0:16:30.840 --> 0:16:32.120 I mean, we were sitting there was a date night, 0:16:32.120 --> 0:16:34.280 and so we were having a great conversation, but we 0:16:34.320 --> 0:16:36.400 still wanted to make sure that we were tipping on 0:16:36.440 --> 0:16:38.560 what our bill would have been. And so because she 0:16:38.640 --> 0:16:40.560 didn't actually bring us a check, I got up and 0:16:40.560 --> 0:16:43.080 went to the bar broke my twenty that way, we 0:16:43.120 --> 0:16:45.320 can still leave, you know, a generous tip. So to 0:16:45.360 --> 0:16:47.120 answer your question, what do I do if I need 0:16:47.120 --> 0:16:48.960 to leave a tip? You just take a little visit 0:16:49.000 --> 0:16:51.560 to the bar. Makes everything better there you go, all right, 0:16:52.320 --> 0:16:54.720 I'll acknowledge that that worked out for you in that 0:16:54.760 --> 0:16:58.400 circumstance without one time I worked out. Yeah. Ultimately, with 0:16:58.440 --> 0:17:01.800 debit cards, there's no in greased friction, so it's pretty 0:17:01.800 --> 0:17:04.200 easy just to kind of swipe that card. The benefit 0:17:04.240 --> 0:17:06.760 that you have with cash is that it's psychologically harder 0:17:06.760 --> 0:17:09.199 to actually spend it. And if you were using an 0:17:09.200 --> 0:17:12.560 actual credit card, you would receive benefits and protections that 0:17:12.720 --> 0:17:15.240 come with using a credit card. You don't have those 0:17:15.240 --> 0:17:18.160 with a debit card. So that's why we would say 0:17:18.440 --> 0:17:22.720 probably avoid debit cards altogether. Yeah, well, here's a quick 0:17:22.800 --> 0:17:25.359 question for you. Debit cards are tied to checking accounts. 0:17:25.400 --> 0:17:28.000 How do you feel about old school paper checks? Oh? 0:17:28.240 --> 0:17:30.280 I think checks are pretty much kind of a bad 0:17:30.320 --> 0:17:33.520 way to go now to especially with identity theft and 0:17:33.520 --> 0:17:36.080 if someone sole your purse or stole your checkbook, they 0:17:36.119 --> 0:17:38.800 have access to your routing number, your account number. That's 0:17:38.800 --> 0:17:41.920 just not a good place to be. And honestly, checks 0:17:41.920 --> 0:17:45.040 are kind of for the most part, in most circumstances 0:17:45.400 --> 0:17:47.720 for us as individual consumers, that kind of gone the 0:17:47.720 --> 0:17:49.119 way of the Dodo bird. I mean, I know that 0:17:49.119 --> 0:17:52.760 they're useful in some circumstances for businesses, but really, when 0:17:52.760 --> 0:17:56.520 we're talking about how we spend as individuals, checks are 0:17:56.520 --> 0:17:58.240 just kind of a thing of the past, I think 0:17:58.280 --> 0:18:00.359 in a lot of ways. Yeah, but again, and plus, 0:18:00.400 --> 0:18:02.159 I mean the security aspect of it, right, I mean, 0:18:02.200 --> 0:18:04.800 I'm not a professional thief or anything, but the fact 0:18:04.880 --> 0:18:07.280 that the routing number and your account number are right 0:18:07.320 --> 0:18:09.920 there on a check, I'm pretty sure that is all 0:18:10.280 --> 0:18:13.159 that a criminal would would need to impersonate you to 0:18:13.240 --> 0:18:15.440 find a way to try to steal some of your money. 0:18:15.480 --> 0:18:17.720 So forge checks, I mean, that's a real thing too. 0:18:17.760 --> 0:18:19.920 So I have a check book, I keep it at home. 0:18:20.200 --> 0:18:21.840 If I ever need to write a check, I have 0:18:21.880 --> 0:18:24.760 access to that. I probably write like two a year maybe, 0:18:24.800 --> 0:18:27.760 I mean, I just it's very, very very rare that 0:18:27.760 --> 0:18:29.800 I actually need to write a check, especially, like we 0:18:29.840 --> 0:18:32.080 mentioned at the beginning of the show, with apps like 0:18:32.160 --> 0:18:35.879 Venmo and cash App and more people accepting credit cards 0:18:35.960 --> 0:18:38.640 and those alternative forms of payment, I mean, checks are 0:18:38.680 --> 0:18:41.760