Here’s an article on credit card vs debit card fraud. There is less personal liability than one would think, even with the use of a debit card.
http://blogs.wsj.com/totalreturn/2015/05/19/fraud-worries-debit-vs-credit-cards/
I struggle with this as a parent of three young teens (18, 16, 14). I feel like I should help them get and use a credit card while they are still under my watch. But the idea of them having a credit card when a constant source of income may be years away is scary to me. And the visa and mc branded debit cards make it so easy to live without a real credit card. I knew way too many people when I was in college that racked up crazy amounts of cc debt with the idea they would just pay it off when they graduated and got a job.
When my kids were minors, I put a cap on their credit card limits. When the credit card companies would raise the limit, I’d call and insist they lower it again. That way, I was sure no catastrophe was possible.
They had a limit high enough for what I thought their reasonable monthly expenses should be and enough, on top of that, to get a emergency flight home if necessary.
“Agree, using a credit card (properly) just makes long term financial sense.”
IMO, paying any interest I don’t need to never makes financial sense. I’ve never paid one dollar’s worth of interest on a credit card. I don’t see why I ever would waste money, “just to build up credit.” That just makes no sense to me.
I agree with not paying interest.
But I also agree with romani that those without a family financial safety net may responsibly use a credit card in that way.
Romani: I have known folks who easily negotiated very long term no interest payment schedules directly with hospitals and doctors and wonder if perhaps that would be possible for you? Probably you already investigated that. It isn’t clear to me where you are carrying the interest free medical costs while you repay them.
This is the main concern with fraud on a debit card versus a credit card:
Sorry I realize now it was awkwardly worded and very vague.
I can pay off the amount but we’d be left with a low cushion in our savings that I’m not quite comfortable with. I opened a new credit card a few months ago that has an interest-free period for 18 months (I previously said 24, I made a mistake… I went and checked after posting lol). I transfered my balance to the new card for a very small fee and now I won’t pay interest until next year. But I’m still slowly paying it off.
The debt is from a combination of expensive meds, walking aids, etc. It’s not just like one visit or one hospital. It’s quite a few little things 
I wanted a cushion because I wasn’t quite sure whether or not I’d be working this fall. There still remains a chance that I will take a medical leave in the fall, but now it’s a very small chance.
Prior to this year, I’ve never paid interest on credit cards in my life.
Oh, and I paid for our small honeymoon with credit card points. The card I have now gives me 5% on Amazon purchases- which is basically 75% of my purchases. Works out pretty well 
Again, I understand being debt-adverse. But I wish millenials would have enough faith in themselves not to go over their limits. It was very quick to get in the habit of paying my credit card every week (which is what I did).
As for the debit card issue, not all of us can afford to wait until the bank investigates to get our funds back. Credit cards cancel the transaction immediately and issue you a new card. That was certainly not the experience when Mr R had his debit card stolen and had money stolen. He only uses credit cards now (this was before we married).
What romani is describing sounds responsible - she’s carrying balances because she has medical expenses, that obviously have to be dealt with. And it’s prudent esp given her health situation to create the cushion in her savings. That’s very different from someone without a precarious situation charging furniture or whatever and paying interest “just to build up credit.”
Both of my kids got credit cards when they turned 18 because both went away for school and might need them for an emergency. The limits were very low $300/$500. I told them to charge $50 a month and pay it off every month. You need a history of using credit and being able to responsibly handle money. You need that credit history to buy a car, to rent an apartment (that is not in a college area), to buy a house. I think it is better to start out with these small limits so they can learn and develop good habits vs getting your first card with a much higher limit based on your salary with the potential of bigger problems.
Both of our girls have had debit cards since they were 14. On the 15th of each month we fund the cards with a set amount. The first year was fraught with forgetting pins, stupid purchases, lost cards, etc.
Now they remember their pins (because we made them go through the rigamarole you need to go through to get it reset), they track their purchases with the capital 1 app so they don’t run out (they HATED being embarrassed at checkouts when they didn’t have enough on their cards),
Now they are starting to plan ahead and save for big purchases and make sure they have enough in their accounts. D17 uses Mint to track, and when she has big purchases she needs to make for robotics she’ll sit with her dad and they’ll transfer money back and forth as needed.
We’d much rather they learn these lessons young than trying to do this at college and us having to figure out how to help them long distance. D17 had to spend an hour on the phone with Capital 1 once because they’d frozen her account due to suspected fraud. H sat with her and helped her through the process. It’s a drag to go through it, and it’s very intimidating to learn how to deal with credit card companies.
We use credit cards, but we pay them off each month. Most spending goes on the delta amex, and we use it for trips to visit colleges and anniversary trips.
Im 19, have a 750 credit score, only 3 cards, soon buying a house, never scared me, im savy when it comes to finances, both my parents are accountants, and they taught me all the tricks, credit cards scare people who are not responsible, I take advantage of them as much as I can.
Though MOD’s approach is sensible, I’m not really sure what needs to be “taught” about using credit cards. It’s just something that enables you to not carry around wads of cash, that’s all. Your overall budget is the same whether you pay cash, check, or credit card paid every month. It’s the budgeting and discipline to stick to a plan that is the key.
It’s very nice that the posters here use their cards responsibly and have high credit ratings. But many millennials grew up in households (or have friends and/or close family who grew up in households) that played the musical-chairs game of the 2000s and lost their jobs and sometimes homes during the crash. Often the only way they had to get some cash was a credit card with an absurdly high limit considering their circumstances. It’s good to see that they learned from that experience.
I had some really hard financial times during that period. My kid was in elementary and middle school and I tried to shield her from it but for sure she saw the struggle.
I’m glad your kids allow you to mentor them. My daughter does not, although she sometimes asks me for information which I am happy to provide. As a college sophomore she got a Discover card with a $500 limit. From the little information she shared, she spent that $500 and couldn’t pay it all back. She no longer uses the card, is working on paying it off, and learned her lesson. Sometimes experience is the best teacher.
Honestly, I don’t know what to say to this. If you screw up how you use credit cards, you go broke. I find the average $15k in family credit card debt in the US appalling.
We’re trying to teach them to not have a debtor’s attitude, not to live in debt, to know when spending costs you more than you think it does (ie when you carry a balance), live within their means, and to try to anticipate needs and save for them rather than react (most of the time-sometimes you just need to put stuff on a card because it makes sense).
I grew up in a fiscally irresponsible household. I went to college and I signed up for a credit card with a $2,000 limit during one of those campus drives. In 1988. I was SO in debt. It took me years to pay that off and to pay off college debt. I had no idea how money worked. All I knew is that I wanted stuff, and that shiny silver card enabled me to have stuff, and that I only had to pay off a little bit each month. It was so bad and so stressful.
My point is - somewhere along the line she got some notion that a Discover card wasn’t cash - that is, it didn’t require the full payout at the end of the month. When we told our kids about credit cards, we didn’t even “teach” that option. They know in theory it exists but it was simply - a credit card is a cash equivalent that merely enables you not to walk around with cash. It doesn’t change the amount you’re able to spend on (food, restaurants, utilities, whatever) one bit. It’s merely a slightly-delayed debit card.
^^Intellectually that makes sense. But then you have to deal with teenagers who tend to be more impulse driven than mature adults, and your sensible kid buys a $200 pair of boots because the limit on the card is high enough.
With a debit card, they KNOW that’s $200 in cash that’s gone. With a credit card, for a lot of people, that number becomes “only 40/month for 5 months”.
and even if you don’t “teach” them that option about credit cards, they’re gonna figure it out.
MOD - I have spent 2 years cleaning up after a relative who accumulated $63k in credit card debt across 4 cards. Just typing that makes me shudder. And not “necessary” or unavoidable debt such as medical expenses. Just plain funsies.
She would have been better off just pretending the “you don’t have to pay this bill in full, just make a minimum payment” feature ever existed.
As I read these post, I don’t know if it was me ,but I have three cards with a total balance of $500 for all, mt first card has a cl of 1200, second of $5000, and third of $2800 , j linked all my cards to my debit account app, I can see all the balances, how much I owe, interest, recent purchase, date for payment. My parents taught me all the ropes, ive never had to ask for a cli. Thats why my credit has risen so much. I think its all about bein responsible, I also took a business math class in highschool, talked about mortgages, loans, car payments, credit card balance, avergae daily balances and everythinf, I think understanding the foundation of credit is key.
“debit card, they KNOW that’s $200 in cash that’s gone. With a credit card, for a lot of people, that number becomes “only 40/month for 5 months”.”
Except it’s not - it winds up being $250 spent on the $200 pair of boots (illustratively speaking of course).
Weirdest coincidence in light of this thread . . . DS took us to dinner last night (sweet kid!), paid with his debit. Checked balance when he got home - the restaurant charged him about 3 times what his tip amount was (two charges - one was the meal, the other one might have been the purported and incorrect tip amount?).
Anyway, he already disputed the charge - no problem. That being said, he keeps a good-sized balance in there so he can wait out the dispute process which can take up to 10 days (though it doesn’t sound like it will take that long).
Because it’s a debit, he checks it almost every day online. He knows where his money is going. Now I’m wondering how many times we have gotten charged incorrectly on our credit card. We scan the bill but we don’t go over it with a fine-tooth comb.
Just thought that was interesting.