Credit Cards

Is Credit cards worth it or there is a risk for mistakes and theft ?

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[OP]
Sr. Member
Apr 5, 2017
607 posts
139 upvotes

Is Credit cards worth it or there is a risk for mistakes and theft ?

Hi Folks,
I migrated to Canada 6 year's ago and have different credit cards like Walmart, TD VISA Infinite, Scotia passport, Capital one Costco, Home depot and so on.
I never paid any annual fees, as I have some premium accounts with major banks & they waive off the credit card fees or some of the cards doesn't have annual fees.
Always paid full balance every month 100%, so credit score is always excellent, about 850.

Now I always wonder, is there a risk whenever we do returns at sores, the money will always come back to credit card ? Once in a while, I had checked and looks like I can see the returns, example like -$85 but do CC companies actually deduct this from our final balance every month ?
Since beginning I always signed up for pre-authorized payment with my banks, so do they take correct amount or there could be mistakes ?
Is it worth keeping CC's or better to use CASH for all transactions, when possible ?
Kindly advice ?
TIA
12 replies
Deal Addict
User avatar
Dec 3, 2017
2695 posts
2287 upvotes
K-W/Guelph
Credit cards have purchase protection so that if someone steals your card you're not liable for what they do with it. If someone steals your cash, it's gone period. That's one benefit consumers have with credit cards.

Now it appears that you're worried when a return is processed that the credit card company isn't rebating you when they take your money from your account. While this is possible it's highly unlikely as it is theft which is illegal. Once a return is posted to your account the balance on the card goes down, and the credit card company will only ever deduct the statement balance from your account. So long as you look at your statements to see if the purchases are being processed correctly I think you'll be fine :).
[OP]
Sr. Member
Apr 5, 2017
607 posts
139 upvotes
jacnel wrote: Credit cards have purchase protection so that if someone steals your card you're not liable for what they do with it. If someone steals your cash, it's gone period. That's one benefit consumers have with credit cards.

Now it appears that you're worried when a return is processed that the credit card company isn't rebating you when they take your money from your account. While this is possible it's highly unlikely as it is theft which is illegal. Once a return is posted to your account the balance on the card goes down, and the credit card company will only ever deduct the statement balance from your account. So long as you look at your statements to see if the purchases are being processed correctly I think you'll be fine :).
Thanks a lot, I think we should consolidate and just keep one or two , that way it is easy to track ! Now if we close unwanted CC's is there any issues in terms of Credit scores or history because Walmart is my first credit card !
Jr. Member
Mar 18, 2006
154 posts
102 upvotes
MK1986 wrote: Thanks a lot, I think we should consolidate and just keep one or two , that way it is easy to track ! Now if we close unwanted CC's is there any issues in terms of Credit scores or history because Walmart is my first credit card !
Usually, you want to keep the oldest card to ensure your "credit file life" is as long as possible, as this will show the most payment history for paying your credit cards.
Deal Addict
User avatar
Dec 3, 2017
2695 posts
2287 upvotes
K-W/Guelph
MK1986 wrote: Thanks a lot, I think we should consolidate and just keep one or two , that way it is easy to track ! Now if we close unwanted CC's is there any issues in terms of Credit scores or history because Walmart is my first credit card !
So when you close older cards it can affect your credit score, however since yours is so high even if you close your oldest it won't fall anywhere which will prevent you from getting more credit. In Canada the banks do care a bit about credit scores but they only care about what threshold you're past. To a bank an 800 or 850 score is the same.

I closed my oldest card, not much happened to my score since my other cards were opened around the same time.
Deal Addict
Feb 4, 2010
4283 posts
3072 upvotes
MK1986 wrote: Thanks a lot, I think we should consolidate and just keep one or two , that way it is easy to track ! Now if we close unwanted CC's is there any issues in terms of Credit scores or history because Walmart is my first credit card !
I agree with this approach - keep 2, use one and keep the other one as a backup (especially if travelling abroad). For your primary, pick one that has the best rewards, for your backup use the oldest one if having credit history is important.

For people who have good discipline with money I think it's better to pay with credit card for a few reasons - you can track your spending, helps with budgeting, collect rewards, easier to prove disputes, many places don't accept cash, can't pay with cash online, don't have to worry about losing cash or counterfeits, etc.
Deal Fanatic
Dec 5, 2006
9481 posts
4691 upvotes
Markham
"Now it appears that you're worried when a return is processed that the credit card company isn't rebating you when they take your money from your account"

What happened? Did I miss anything in this forum?
Deal Addict
Sep 14, 2012
1402 posts
983 upvotes
Montreal, QC
MK1986 wrote: Thanks a lot, I think we should consolidate and just keep one or two , that way it is easy to track ! Now if we close unwanted CC's is there any issues in terms of Credit scores or history because Walmart is my first credit card !
I would recommend having a minimum of 2 credit cards since you never know if your credit card gets compromised (while still in your possession) and the credit card company puts a lock on your card. This can be a nuisance in the best of times but if you're travelling and this happens to the only credit card you have, you are in for a major headache/inconvenience.

I have multiple credit cards and when travelling to the US, even though I only have plans on using my US dollar credit card, I will still bring 1 or 2 other credit cards (Canadian dollar cards) with me in case something happens. In most of my trips to the US, I've never used my Canadian credit cards there since getting my US dollar credit card but if my US credit card ever got compromised or lost while I was in the US, I would want to have another credit card with me.

If you close your unwanted/unused credit cards, this will affect your credit score if you close the oldest card(s) if the card(s) that you decide to keep are significantly newer. For example, if I had a credit card which was 20 years old and my other cards were less than 3 years old that I decided to keep, this would significantly impact my credit score. However, if my oldest card was 4 years old and my other cards were like 2 years old, me cancelling the 4 year old card wouldn't impact my credit score significantly.
Deal Addict
Sep 14, 2012
1402 posts
983 upvotes
Montreal, QC
MK1986 wrote: Now I always wonder, is there a risk whenever we do returns at sores, the money will always come back to credit card ? Once in a while, I had checked and looks like I can see the returns, example like -$85 but do CC companies actually deduct this from our final balance every month ?
Since beginning I always signed up for pre-authorized payment with my banks, so do they take correct amount or there could be mistakes ?
Is it worth keeping CC's or better to use CASH for all transactions, when possible ?
Kindly advice ?
TIA
When doing returns at the store, I've never had it where the return was not processed on my credit card when done correctly and when the receipt that the store gives me shows that they refunded me the money.

In terms of you seeing -$85 for the return on your credit card statement (or online), if you added up the charges on that month's statement and subtracted all payments including the return, you will see that the balance due is correct. I've never had it where it wasn't correct so I'm not sure why you are worried about this since if you see it there, it will be taken care of. It is like depositing money at the teller and then seeing the deposit on your statement and wondering whether they actually increased the amount in your account by the deposit that you see on your statement or if you see $3.50 in interest on your savings account statement whether they actually increased your savings account balance by $3.50.

In terms of signing up for pre-authorized payments at the bank, if you are referring to doing this with a credit card, where the entire balance of the credit card is automatically paid off using your bank account, I personally don't feel comfortable doing this, since in the event of a dispute in a charge, I don't want the bank to pay that credit card's entire balance. Also, if for example I charge an expensive purchase like something for $2,000 and then my credit card statement comes in showing this charge but I subsequently went to the store to return the $2,000 item, I don't want to pay for the $2,000 from the credit card statement since it was already taken care of with the return. If you are referring to pre-authorized payments at the bank for something like car insurance, I would generally not do this but I feel that it is safer and if that was the only option as opposed to making a single large payment, I would probably do it.

In terms of whether it is better to use cash or credit cards for all transactions, I would say that if a person knows how to use credit and stays within their budget, it is generally better to use a credit card unless the business gives a "cash discount". Not only are you getting points/cashback by using a credit card, but you also have the protection from using a credit card (some cards come with accidental damage insurance, or theft protection, etc.) as well as not having to worry about having the cash and exact change in your immediate possession.
[OP]
Sr. Member
Apr 5, 2017
607 posts
139 upvotes
smartie wrote: "Now it appears that you're worried when a return is processed that the credit card company isn't rebating you when they take your money from your account"

What happened? Did I miss anything in this forum?
I have at-least 5-6 credit cards and use all of them while shopping, so its really hard to keep track on returns and monthly usage as I do pre-authorized payments too, so I'm worried, do CC companies actually do the math properly and reduces the return credit from final monthly payments without me sitting and doing all the math to make sure they are doing it right or not ?
[OP]
Sr. Member
Apr 5, 2017
607 posts
139 upvotes
lmcjipo wrote: When doing returns at the store, I've never had it where the return was not processed on my credit card when done correctly and when the receipt that the store gives me shows that they refunded me the money.

In terms of you seeing -$85 for the return on your credit card statement (or online), if you added up the charges on that month's statement and subtracted all payments including the return, you will see that the balance due is correct. I've never had it where it wasn't correct so I'm not sure why you are worried about this since if you see it there, it will be taken care of. It is like depositing money at the teller and then seeing the deposit on your statement and wondering whether they actually increased the amount in your account by the deposit that you see on your statement or if you see $3.50 in interest on your savings account statement whether they actually increased your savings account balance by $3.50.

In terms of signing up for pre-authorized payments at the bank, if you are referring to doing this with a credit card, where the entire balance of the credit card is automatically paid off using your bank account, I personally don't feel comfortable doing this, since in the event of a dispute in a charge, I don't want the bank to pay that credit card's entire balance. Also, if for example I charge an expensive purchase like something for $2,000 and then my credit card statement comes in showing this charge but I subsequently went to the store to return the $2,000 item, I don't want to pay for the $2,000 from the credit card statement since it was already taken care of with the return. If you are referring to pre-authorized payments at the bank for something like car insurance, I would generally not do this but I feel that it is safer and if that was the only option as opposed to making a single large payment, I would probably do it.

In terms of whether it is better to use cash or credit cards for all transactions, I would say that if a person knows how to use credit and stays within their budget, it is generally better to use a credit card unless the business gives a "cash discount". Not only are you getting points/cashback by using a credit card, but you also have the protection from using a credit card (some cards come with accidental damage insurance, or theft protection, etc.) as well as not having to worry about having the cash and exact change in your immediate possession.
Yes , all my credit cards are being paid in full from my bank account and I had never kept a track of it ! I hope they are doing it right ?
Deal Addict
Sep 14, 2012
1402 posts
983 upvotes
Montreal, QC
MK1986 wrote: Yes , all my credit cards are being paid in full from my bank account and I had never kept a track of it ! I hope they are doing it right ?
That's a mistake...

It isn't "wrong" that you are paying the balance in full automatically via pre-authorized payment but that you don't check your credit card statements and monitor your expenses.

Occasionally there will/might be mistakes. These are rare but it does happen. There can also be unauthorized charges that the bank's system didn't catch which in my opinion is still somewhat rare but happens more frequently than mistakes in charge amounts appearing on the statement.

When I get my credit card statement, I look at it "quickly" and verify all the charges that appear there seem to be correct (I look at the name of the business and look at the charge). I don't compare the charge with what I actually paid (i.e. I don't take out all my receipts for that month and compare it) but I have a good idea of the amount that I charged. For example, if I go to a grocery store and charge $53 and tap my card on the credit card machine and it produces a receipt, I verify the charge on that receipt. When the statement actually comes in, I'm 99.9% sure that it will be accurate with the actual charge when I see a charge of ~$50, I know that it is accurate and not need to find the receipt to see that it was actually $53 that I charged at the grocery store.

I also set my credit card to instantly notify me of charges via email so once I receive the email, I know that it will appear properly on my statement.
[OP]
Sr. Member
Apr 5, 2017
607 posts
139 upvotes
lmcjipo wrote: That's a mistake...

It isn't "wrong" that you are paying the balance in full automatically via pre-authorized payment but that you don't check your credit card statements and monitor your expenses.

Occasionally there will/might be mistakes. These are rare but it does happen. There can also be unauthorized charges that the bank's system didn't catch which in my opinion is still somewhat rare but happens more frequently than mistakes in charge amounts appearing on the statement.

When I get my credit card statement, I look at it "quickly" and verify all the charges that appear there seem to be correct (I look at the name of the business and look at the charge). I don't compare the charge with what I actually paid (i.e. I don't take out all my receipts for that month and compare it) but I have a good idea of the amount that I charged. For example, if I go to a grocery store and charge $53 and tap my card on the credit card machine and it produces a receipt, I verify the charge on that receipt. When the statement actually comes in, I'm 99.9% sure that it will be accurate with the actual charge when I see a charge of ~$50, I know that it is accurate and not need to find the receipt to see that it was actually $53 that I charged at the grocery store.

I also set my credit card to instantly notify me of charges via email so once I receive the email, I know that it will appear properly on my statement.
Sounds great. Thanks for your advice, will do that !

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