Credit Card Purchase - 'it is the bank's money no[t] yours' ?
Yes, they're referring to the credit card dispute (chargeback) process. In the case of dispute, credit card company will refund/freeze your charge so you don't have to pay until the dispute is resolved (or at all, if resolved in your favor). If the dispute is resolved in your favor, your credit card company will charge back the merchant's service provider which in turn will charge back (if it can) the merchant itself. So the one taking the most risk in this scenario is the merchant provider, this is why merchants that are high risk pay significantly higher fees or get dropped. "The statement is (in laymans terms - if not in real terms) correct. Most credit cards (I know this to be true for VISA and Mastercard) have dispute processes and will do a chargeback on the merchant - ie take the money back from the supplier in cases where you don't receive the goods or other fraud - Particularly if they can't produce a signature and (for transactions which are not face-to-face) a tracking number. Your exact rights will vary by bank, but mostly they need to follow the guidelines set by the Credit Card company - and you do need to be a bit careful - if you received goods which were fake or a dispute arises you may be up for shipping the goods back to the merchant - and you have a limited - but reasonable time - in which to make the dispute. (The statement ""the money is the banks"" is not technically true, there is no money involved until you pay it, only credit [ they are very different, but almost no-one knows that, I communicated with a Minister of Finance on the topic], but this is quite technical and as a layman not something you need to worry about here)"
"Great, I wonder how I the customer will be paying for this. I don't know exactly when it happened or the specifics but BOA lost 500 million in some bad loan or something a while back and a month later started taking on fees to what used to be free services. They started charging 5 dollars for a replacement debit card and other stuff like that. Their explantation for it was ""we have the right to make a profit"" when really it just seems they were covering their asses. Instead of cutting costs internally like an ethical/responsible company would, they make their customers pay for it. As soon as my credit card account goes up for renewal I am done with that bank." Your chief problem seems to be that you're mixing Visa (credit cards) and Step2 (a European Automated Clearing House). Credit cards are primarily an American concept, but do work worldwide especially in travel&tourism industry. The Credit Card companies are financial institutions themselves and operate similar to international banks They're typically acting as intermediaries between the customer's bank and the retailer's bank, so this works even if those two banks have no existing agreements.  This is expensive, though. Step2 is a cheaper European system which eliminates the middle man. It allows the consumer's bank to directly pay the retailer's bank. VISA is not a member of Step2. There are three parties involved here: there's the store that issued you the card, then they have some bank that's actually handling the account, and there is some network (VISA, MasterCard, etc.) that the transactions go through. So one avenue to consider is seeing whether all three are aware of you canceling the card. Etiquette doesn't really come into the picture here. The business offers a service and I choose to accept it. Personally, I use my debit card as much as possible. For every transaction, I record it in my checkbook. Then, when I do reconciling, I know exactly how much I paid for various categories of stuff. Good for budgeting. Most often my purchases are over $10 but when they aren't, I have no qualms about using the card. Credit cards are often more fool proof, against over-drawing. Consider Bill has solid cash flow, but most of their money is in his high interest savings account (earning interest) -- an account that doesn't have a card, but is accessible via online banking. Bill keeps enough in the debit (transactions) account for regular spending, much of which comes out automatically (E.g. rent, utilities), some of which he spends as needed eg shopping, lunch. On top of the day to day money Bill keeps an overhead amount, so if something happens he doesn't overdraw the account -- which would incur significant fees. Now oneday Bill sees that the giant flatscreen TV he has been saving for is on clearence sale -- half price!, and there is just one left. It costs more than he would normally spend in a week -- much more. But Bill knows that his pay should have just gone in, and his rent not yet come out. Plus the overhead he keep in the account . So there is money in his debit account. When he gets home he can open up online banking and transfer from his savings (After all the TV is what he was saving for) What Bill forgets is that there was a public holiday last week in the state where payroll is operated, and that his pay is going to go in a day late. So now he might have over drawn the account buying the TV, or maybe that was fine, but paying the rent over draws the account. Now he has a overdraft fee, probably on the order of $50. Most banks (at least where I am), will happily allow you to overdraw you account. Giving you a loan, at high interest and with an immediate overdraft fee. (They do this cos the fee is so high that they can tolerate the risk of the non-assessed loan.) Sometimes (if you ask) they don't let you do it with your own transcations (eg buying the TV), but they do let you do it on automated payements (eg the Rent). On the other hand banks will not let you over draw a credit card. They know exactly how much loan and risk they were going to take. If Bill had most of his transactions going on his credit card, then it would have just bounced at the cash register, and Bill would have remembered what was going on and then transferred the money. There are many ways you can accidentally overdraw your account. Particularly if it is a shared account. As far as I can see, this is an issue of the bank's policy rather than some legal regulation. That means that you'll need to work it out with the bank.  To give you a couple of ideas to work with when you talk with them, maybe something from this list will work: Good luck! "I found the study ""The irrationality of payment behaviour"" accidentally while searching on the term ""DNB Study"" instead of ""D&B Study"".  This study, which, when I followed the link, went to the web site dnb.nl (Dutch National Bank), instead of dnb.com (Dun & Bradstreet).  It mentions all the salient points that I hear Dave Ramsey and others mention when they talk about studies on this subject of credit vs cash.  Also, it cross references to many other studies by various researchers, banks, and universities.  Is this the ""missing mythical DNB study?""  I'll let you decide.  Relevant ""coincidental"" points from the study: To be fair and complete, I should mention that clearly the relevant parts of this DNB study are talking about discretionary spending.  Auto-paying your mortgage with a card is clearly not going to cost you more (unless you somehow forget to pay off the card or some other silliness)." Exactly.  Or if you prefer, they were not acting *as* banks when doing so.  (Well, at least by the definition I gave, obviously.  If you prefer a different definition, you get a different answer.  Although I'm not sure there really is a useful definition of banking that would cover the behaviour you described.) I would presume this goes entirely through the credit card network rather than the banking network. I am guessing that it's essentially the same operation as if you had returned something purchased on a card to the store for credit, but I'm not sure whether it really looks like a vendor credit to the network or if it is marked as a different type of transaction. Short answer: No. Some of those 'automatic' payments you've agreed to (presumably by signing a PAD form) are initiated in batch by the company whom you're buying from (phone company, cable company etc). So no, the bank has no indication from one day to the next what is coming through.  And the request goes from say, your cable company to THEIR merchant bank to YOUR bank. Typically you have a monthly bill date which is fixed, and they should have terms established when it is due.  If a payment comes back NSF they can retry once - but only for the same amount and I believe it is 14 days from the initial payment attempt.  It makes it predictable, and you'd figure banks would clue in and start to predict for you when things may come out - but strictly speaking your bank doesn't know when or how much. Oh yes, it is absolutely the problem of the consumers. After all how is the bank to know how it should be doing business unless the customer explains it to them?  Please read the other comments about how the customer has verified receipt of some critical document and then they claim that they don't have it. Sure they are very nice on the phone, but that doesn't help when I have to take time out of my work day to call them repeatedly. A debit card takes the funds right from your account. There's no 'credit' issued along the way. The credit card facilitates a short term loan. If you are a pay-in-full customer, as I am, there's a cost to lend the money, but we're not paying it. It's part of the fee charged to the merchant. Thus the higher transaction cost. You'd have to consult a lawyer in the state that the transaction took place to get a definitive answer.  And also provide the details of the contract or settlement agreement. That said, if you clearly presented the check as payment (verbally or otherwise) and they accepted and cashed the check, and it cleared, you should have good legal standing to force them to finalize the payment.   While they had every right to refuse the payment, and also every right to place a hold on the credit until the transaction cleared their bank, they don't have the right to simply claim the payment as a gift just because it came in a different form than they specified in the contract.  Obviously this is a lesson learned on reading the fine print though.  And, to be frank, it sounds like someone wants to make life difficult for you for whatever reason. And if that is the case I would refer back to my initial comment about contacting a lawyer in that state. "&gt; Or just remember how much you spent. The purpose of my comment was to say the online balance isn't a true balance, not that I had trouble balancing a book.   Except that you rather obviously *don't* comprehend what the meaning of ""true balance"" is.  The balance the bank shows on it's online system (or it's statements) is very much a ""true balance"" **of the transactions the BANK is aware of** (i.e. the ones that have been processed).  That you think the bank should somehow be ""magically aware"" of the fact that you just signed a credit card transaction -- or that you wrote a check and mailed it off to someone -- demonstrate that you lack a fundamental comprehension of the system.  And the ""just remember how much you spent"" as an excuse for not properly (independently) **recording (and mathematically subtracting)** what you have spent...  Is demonstrative of both ignorance AND laziness." If your gut told you to buy during the depths of '09, your gut might be well-calibrated. The problem is stock market declines during recessions are frequently not that large relative to the average long run return of 9%:  A better strategy might be hold a percentage in equities based upon a probability distribution of historical returns.  This becomes problematic because of changes in the definition of earnings and the recent inflation stability which has encouraged high valuations:  Cash flow has not been as corrupted as earnings now, and might be a better indicator:  This obviously isn't perfect either, but returns can be improved. Since there is no formulaic way yet conventionally available, the optimal primary strategy is still buy & hold which has made the most successful investor frequently one of the richest people on the planet for decades, but this could still be used as an auxiliary for cash management reserves during recessions once retired.