Author Topic: Debitize Thoughts  (Read 739 times)

dreadmoose

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Debitize Thoughts
« on: September 13, 2017, 10:19:32 AM »
Hey guys, I just read about this and thought it may be useful for anyone having trouble keeping on top of their rewards cards.

Basically turning your credit cards into auto-paid off debit cards. Has anyone used this service or see a use case for it? I pay mine off every month but could see how this may help if someone had trouble budgeting closely enough.

I haven't read too much into it yet but the main negative I can see is that it ties your money up for the month the second you spend it when you could be earning interest on it, but that would turn into pennies that may not affect actual FIRE or stash's at all.

https://debitize.com/#howitworks
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frugaliknowit

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Re: Debitize Thoughts
« Reply #1 on: September 13, 2017, 01:29:07 PM »
My thoughts are:

1.  I don't need to pay someone to do for me what I can do myself for minimal inconvenience.
2.  I don't care about my credit card balance being "tied up" prematurely since savings account rates are near 0%.
3.  I have concerns regarding security.  You are giving out A LOT of information for potential hacking.

Syonyk

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Re: Debitize Thoughts
« Reply #2 on: September 13, 2017, 04:48:04 PM »
Uh...

Quote
1. Make purchases on your credit card as you normally would

2. We deduct the amount from your checking account each day

3. At the end of the month we pay your credit card bill

4. Sit back and relax! We got you covered.

Letting someone else skim the interest for something I could do myself just fine?

There's no difference I can discern between this and "auto-payment in full every cycle," which is how I normally leave my cards, unless you can't cover your expenses at the end of the month.

It seems like the "sell" is that if you're using debit cards (I guess to prevent you from spending more than is in your account?), you can have the same impact with credit cards and still see the money disappearing out of your account daily.

I don't use debit cards unless I have to in the first place (the nuisance level of my debit card being stolen and account being drained is potentially higher than for my CC balance being run up fraudulently), so I'm apparently not the target market here...

It's not something I see any reason to sign up for, unless there's something massive I'm missing in how it works or what it offers.
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threefive

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Re: Debitize Thoughts
« Reply #3 on: September 13, 2017, 09:17:16 PM »
Just ... why? I cannot think of a single case use for this "service." Every credit card company allows you to sign up for autopay, where you can have the whole thing paid off every month automagically for free without some middle-man software. I can set some of my cards to pay off twice a month.

Syonyk

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Re: Debitize Thoughts
« Reply #4 on: September 13, 2017, 09:39:08 PM »
Just ... why? I cannot think of a single case use for this "service."

The only thing that makes sense to me is if you're operating on a "I still have money in my bank account, I can still spend more!" approach to finances and spending, and have been using a debit card based on that.  If you can get the same crutch and get CC rewards, it's of some limited value.  That seems to be what they're targeting.

But, otherwise, I've got no idea either.  I'm pretty sure this forum is very decidedly not the target market.
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dreadmoose

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Re: Debitize Thoughts
« Reply #5 on: September 14, 2017, 11:43:10 AM »
Just ... why? I cannot think of a single case use for this "service."

The only thing that makes sense to me is if you're operating on a "I still have money in my bank account, I can still spend more!" approach to finances and spending, and have been using a debit card based on that.  If you can get the same crutch and get CC rewards, it's of some limited value.  That seems to be what they're targeting.

But, otherwise, I've got no idea either.  I'm pretty sure this forum is very decidedly not the target market.

Those were my thoughts exactly, this forum is super on top of their money and paying bills on time, etc so there is really no need.

The use case I see is a group that always confused me when they argue that debit cards are the only safe way to exist (basically what was said before about seeing the money come out of your account immediately).

I would be interested to see what credit card companies think of this system as their response would speak to their need to keep everyone in debt and paying interest each month.
Just starting on my FIRE journey, hopefully posting here creates accountability and eventually lowers my very anti-mustachian life habits.

Syonyk

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Re: Debitize Thoughts
« Reply #6 on: September 14, 2017, 06:47:47 PM »
I would be interested to see what credit card companies think of this system as their response would speak to their need to keep everyone in debt and paying interest each month.

They don't care one way or another if you pay your card off or not - they make their 3% on the purchase price (pick your rate program, it works out to about 3%) even if people are paying every month.  Though they will start sending a ton of promotional checks and other nonsense if you keep your utilization down.  "Buy something you want!  Take a vacation!  Write it to cash and roll in the bills!  Whatever, here's 'free money' for you to use!"
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Lmoot

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Re: Debitize Thoughts
« Reply #7 on: September 15, 2017, 04:41:43 AM »
 One of the reasons I prefer to use credit cards, is so I can leave the cash in the bank earning interest. Why would I want someone to take my cash out every day? No thanks. Besides, most of my cards are on 0% promotional rates, I don't want to pay off purchases as soon as I make them, not until they are due. Which some of them are not due until 2019.

boarder42

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Re: Debitize Thoughts
« Reply #8 on: September 15, 2017, 10:51:29 AM »
its an ingenious idea on their end to skim interest off of your money.
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dreadmoose

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Re: Debitize Thoughts
« Reply #9 on: September 15, 2017, 11:00:41 AM »
its an ingenious idea on their end to skim interest off of your money.

Indeed, for awhile I was wondering why companies don't exist in this capacity more (I hold all your money and pay your bills for you so I get the interest).

That is, until I realized that is exactly what a bank is and they're the largest companies around.
Just starting on my FIRE journey, hopefully posting here creates accountability and eventually lowers my very anti-mustachian life habits.

Rosy

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Re: Debitize Thoughts
« Reply #10 on: September 15, 2017, 12:43:01 PM »
Definitely of no use to me. I do occasionally pay off a card within the month of using it, but mostly I prefer to have my money earn a bit of interest until my bill is actually due.
No sense in giving someone else the use of my money and to add insult to injury - give away the bit of interest that should be mine:) 

dycker1978

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Re: Debitize Thoughts
« Reply #11 on: September 15, 2017, 12:46:28 PM »
Wait What?  They transfer out of my bank account every day to their's?  I have an issue with that, never mind the interest skimming.  Who is to stop them for empting my accounts when then disappearing?

GuitarStv

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Re: Debitize Thoughts
« Reply #12 on: September 15, 2017, 12:49:09 PM »
It is fascinating what some people will pay for.