jw1980

At the time the authorization is granted, they are liable to the merchant for the full amount. If the merchant does not settle the transaction promptly, then there is nothing the bank can do. How is the bank supposed to distinguish between a supposedly "valid" hotel hold, and an "invalid" gas pump hold, if the gas pump waits 1-2 days before settling in batch? The bottom line is that when an authorization is granted, a liability must be accounted for in the amount of the authorization, until the merchant either drops the authorization, or submits the final transaction amount for settlement. The only difference between a long-term commitment and a short-term commitment is the amount of time the merchant takes to promptly settle the transaction. If a badly behaved gas pump is overauthorizing then batching transactions with an unreasonable delay, then how can the bank be to blame? Some banks will hold authorized funds immediately, but wait several days to return funds from the gap between a final settled amount and the initial authorized amount. That is a problem, and the regulators need to see that, as far as instant settlement networks are concerned, that funds are returned with the same speed as they are held. This is only a small part of the overall problem, and not all banks engage in this practice.

If the bank issues an authorization for $100, they are on the hook for up to $100. If your account has less than $100 in it, then the bank has granted you courtesy credit on a debit account, which is what the fee is charged for. The real blame rests on the payment networks for using a protocol designed for authorizing credit cards to also authorize debit cards, now that debit cards have become America's preferred form of payment. Blame also rests on the merchants and their processors, for using pending authorizations far in excess of what the typical consumer spends. $1 is reasonable, $30 might be pushing it, but $100 in the current economy is not acceptable. That number might have been acceptable back in July using SoCal's prices, but it is not okay any longer, except for commercial vehicles. The blame doesn't stop there, either. The practice has become well known to anyone who actively uses their debit card, and has been featured in countless news reports. It is not a hidden secret. Even though the merchants should not be using it, anybody who knows about it and does nothing to avoid the fee bears some of the blame for the fee. If a person keeps a buffer in their checking account, the fee won't happen. Or, if the person lacks the money for that, they can always choose to pay for their gas inside. Paying inside is 100% effective at preventing this fee, as inside terminals do not over authorize.

If you search Google images it will. Google images is not running OCR on images.

A mistake with a debit card can easily result in multiple overdraft fees in the course of a day, whereas a credit card is penalized for going over the limit once per statement.

Have your employer add the names (or just yours) as an image, not text. The search engines will not index words or names in images.

:rofl: :rofl: a pound of feathers or a pound of sand? What about a pound of feathers or a pound of gold?

Nope.

Yep. Then again, if we educated people in high school to add and subtract, then checking would no longer be free for you because the banks would have to make up that lost revenue somewhere, right? Yep. If the opportunities created through marketing efforts no longer existed, I would have to completely restructure my entire budget.

This is why checking is free for those of us who can add and subtract.

What exactly do you mean? If a security guard is going to use reasonable force to stop a suspected shoplifter, then legally, they better be damn sure that person is actually a shoplifter. If the person is not a shoplifter, the security guard can be sued for assault or battery, regardless of whether or not he had a reasonable belief that a theft had occurred. If you owned a business, would you trust a security guard to be 100% right about those sorts of things, and not cause a huge lawsuit against your business, or would you tell the security guard to not touch anyone?

What exactly do you mean? If a security guard is going to use reasonable force to stop a suspected shoplifter, then legally, they better be damn sure that person is actually a shoplifter. If the person is not a shoplifter, the security guard can be sued for assault or battery, regardless of whether or not he had a reasonable belief that a theft had occurred. If you owned a business, would you trust a security guard to be 100% right about those sorts of things, and not cause a huge lawsuit against your business, or would you tell the security guard to not touch anyone?

If people don't learn to budget and be responsible with money, then they will be at serious risk of reverting to their old, wasteful ways when the necessity of following Ramsey's teachings is no longer immediate. Following a mechanical system is no substitute for learning basic responsibility. If financial literacy, budgeting, and responsibility were drilled into people while in high school, Ramsey would not be profiting like he is now.

It is rather simple. Apply budgeted money to a credit card, and spend on it within the budget. If a person can't resolve to create a budget and stick to it, maybe Ramsey should also be tying their shoelaces.

That mentality still enables people to live paycheck to paycheck, albeit with less revolving debt. Using cash in this manner is dangerous, as it allows overspending. The only way to not overspend is to budget properly. With my credit cards, if it isn't in the budget, I don't spend it. That works much better than using possession of subprime cash alone to limit purchasing.

What the Ramsey zombies don't understand is that continued usage of a credit card gets you out of debt faster, and here is why: Say you are revolving a balance on a credit card at a high rate. Obviously, any new purchases increase the average daily balance, and therefore, increase the interest paid. That should be a reason to put the credit card away, right? Wrong. To use a debit card like Ramsey suggests, the money must first be sitting in a checking account, where it is earning little to no interest. Money from work is deposited, where it sits idle throughout the period of time that purchases are being made with it. If the budgeted money for both spending and CC paydown had been immediately paid towards the credit card, the balance would be dropped down, then incrementally brought back up as budgeted money is spent. The mathematical result is that the average daily balance is less, and the user has the opportunity to earn rewards. For example, say that you have a $10,000 balance at 19.9%. For easy math, we will consider day one to be the first day of the new statement. On that balance, you would pay roughly $166.58 in monthly interest. Assume that you charge $1000 per month on your card. Assume also, that you are paying $250 per month towards the card to get it paid off. If on day one, you paid the money needed for your chargeable monthly expenses, plus debt reduction payments, to the credit card (total of $1250) towards the card, your new balance would be $8916.58. If the $1000 in spending were spread evenly over the month, your new average daily balance would be roughly $9416.58, with an ending balance of roughly $9916.58. On an average daily balance of $9416.58, at 19.9%, your monthly interest charges would be $156.16. Using a decent rewards card, you could also expect somewhere about 1.5% average (base + bonus) cash back, or another $15. By prepaying the credit card to reduce the average daily balance, and then collecting the cash back reward, you come out roughly $25.42 to the positive. If your monthly spending were higher, then your savings would be higher. If you spend $2000 a month on expenses chargeable to plastic, your gain would be $50.84. This is basically free money. It costs you nothing to do this. The only requirement is using your credit card in this manner. It isn't a massive amount of money, but when you are working to eliminate debt, every bit of savings counts. Where did the money come from? Two sources: 1. A reduced average daily balance on the credit card, resulting from prepaying the monthly expenses that would have to have set in a checking account for Ramsey's proposed debit usage. 2. Good cash back rewards, above and beyond what lousy reward debit cards offer. The Ramsey zombies would say that continuing to use a credit card is dangerous. It isn't. If the ending balance of the next statement exceeds the previous balance minus the minimum principal payment, then you have blown your budget and you need to audit expenses to see where the excess came from. Easy.