BANKING AND THE RV’er
Whether you full-time In your D or not, this article is pertinent to you.
With the advent of online banking, it is perhaps not quite as important having access to a nearby brick and mortar bank, but sometimes it is nice. However, there are other factors that can far outweigh geographic consideration, such as fees and other services offered. When choosing a bank, check their geographic locations and choose the one that works best for you based on all parameters.
Credit or Debit card?
By Federal law, your maximum exposure for unauthorized use of your credit card tops out at $50..PERIOD! If only your credit card number is stolen but not your card (think skimmers), you are NOT liable for any use. ALSO, note that NOTHING comes out of your bank account when someone makes a fraudulent charge.
With your debit card, by Federal law, your liability depends on the timeframe that you report the loss of your card. If you report your card as being lost or stolen BEFORE any fraudulent charges are made, you maximum loss is $0. Within two business days after you learn about the loss or theft, your maximum loss is $50. Less than 60 calendar days after your statement is sent to you, your maximum loss is $500. More than 60 calendar days after your statement is sent to you, you lose ALL the money taken from your ATM/Debit card account AND money in any accounts LINKED to your debit account. As RV’ers, the 60 day rule can come into play with General Delivery mail pickup. Yes, most banks will waive fraudulent charges, up to a limit, but they are not compelled to by law. In the meantime, you may find yourself overdrawn on your checking account and your debit card refused when you need to use it. Now you have a real hassle.
But wait, there’s more. Make a charge on your credit card, it just subtracts from your credit limit. Your “real” money in your checking account isn’t touched. Buy some fuel at a gas station, and they automatically put a “hold” on $50-$100 which can take several days for the actual charge to remove the hold. With a credit card, you are assumed “innocent” as any disputes reverse the charges back in your favor, and the merchant has to “prove” the charge is valid. Exactly the opposite with a debit card.
OK, but I need a debit/ATM card to get cash on the road. Well, there is another great option. Discover Card offers Cash Over which gives you cash over and above your purchase with NO fees of any kind (assuming you pay off your card balance – you will pay the monthly credit card interest if you don’t). The only limit is $120 every 24 hours with no monthly limit. See the Discover Card website for more info and a long list of stores that participate nationally.
Knowing what you know now, why would anyone want a debit card? The only time I have ever used one was to purchase airline tickets online because using a debit card instead of a credit card saved me $35. By bank was very helpful in providing a one-time use debit card.
Choose your credit card wisely. The best credit cards will pay you 2% cashback on all purchases and up to 6% back on fuel and at least 3% back on groceries. I use several credit cards. One is good for 2% back everywhere, one is good for 6% back on fuel and 3% back on groceries, and the other has rotating quarterly categories for limited 5% cash back. One card I have also gives 10% back for all cellular charges made in 2016. Note that I choose to get a card with actual cash back and NOT airline miles, etc. Every year, I get at least $2000 back, and it is TAX FREE! That buys a lot of diesel at 2016 prices.
Personally, I like to have a lot of cash available in case of an emergency. Keeping this cash in a typical checking account that pays maybe 0.001% interest is stupidity. There are numerous money market accounts that are available that pay at least 0.9% and as much as 1.2% (rates can change monthly). Even better, occasionally some money market accounts offer a bonus for a certain deposit amount for a certain period of time. So far, in 2016, I have collected over $1200 just in sign-up bonuses for just doing a little legwork. All the accounts were created online, all are with major financial institutions, and all were funded from my Bank of America checking account with no charges from anyone. Also, almost all of these money market accounts offer free checking (usually limited to six checks/month). Note that this also requires a bit of due diligence on your part to keep track and move your money around to keep it working best. As an example, at Chase, my money had to be kept in the account for three months to earn my $400 bonus, but after three months, it is only earning 0.001% - obviously, after three months, I closed the account and transferred the money to another money market account paying 1.11%.
For 2016, these strategies have resulted in almost $5000 extra in my pocket, tax free. Your mileage will vary based on current offers and the amount of money you can commit.
When it comes to paying recurring bills, I subscribe to automatic payments. Only one (water bill for our house in Florida) will not use a credit card, so it uses my checking account. All others use a credit card, with 2% cash back. My credit card bills are automatically paid in full from my main checking account. Most of my credit cards give me notifications (virtually immediately) when any charge is made to my credit card and I also use the Prosper app on my phone to get the same information as a backup.
Submitted by Bob Cook