The Debit Debate

You may not believe this but I don’t own a credit card. Never have, in fact.

In Mexico, at least that’s how it was when I used to live there, everything was handled in cash. We paid tuition fees in cash, we paid groceries in cash, we paid electricity and water bills, the bus, gas, movies….. every thing was paid in bills and coins. I never even had a bank account until the year I started working and I needed a place to put my wages at the end of each quincena (which was paid in cash by the way).

Of course credit cards and money wires existed and people would pay for “big stuff” like appliances and furniture and cars and things like that with a credit card, but you didn’t need to have one in order to subsist, and come to think of it, I don’t think I even knew any one that carried a check book in their purse.

Now, I know some parents in the states open bank accounts for their kids at a certain age to teach them how to balance a check book and I know that students get bombarded with credit card offers when they get to college, but I never experienced either of these situations growing up in Mexico.

I had what my parents called a “Payday”. Payday was a fixed amount of money that my siblings and I received (in cash) at a certain day of the week in retribution for doing our chores and keeping up our grades. A cooler word for bribe, if you will. I think the equivalent actually exists in Mexico and it’s called a “Domingo” because it’s paid on Sunday. Anyway, during most of my life in Mexico, this Payday was my sole income and with it I slowly learned how to save it (hide it my sock drawer), invest it (buying pretty pens for my school notes counts as investing in my future, doesn't it?), spend it intelligently (wait for the "Happy Hour") and basically make it last until the next Payday. You can say this was my schooling on managing a budget. Frightening, I know.

And then I came to France.

Here, the situation is the exact opposite. Almost nobody uses cash here. I often go for weeks without withdrawing any cash from the bank and I never carry more than 5 or 10 euros in my wallet.

Here they have what is called a Carte Bleue. The carte bleue (blue card) is the universally accepted method of payment. It's not always blue, but open any bank account in France and you will get a carte blue. There are next to no restrictions to acquiring one and you can have several at any given time (conditions might change slightly from one bank to another).

You can pay anything with a carte bleue, from an 80 cent baguette at the supermarket to a 2000 eur computer at the Fnac. Some places wont take cash and only will accept payment with a carte bleue. The limit you can spend in a month is usually fixed by your bank but you can usually modify this limit by simple request.

See, the carte bleue is a credit card without the credit part. And it’s a debit card without the immediate debit. When you pay with your CB the amount is registered in your bank account but the actual money is not withdrawn until the end of the month (usually during the first days of the following month) which means, you can go on paying with your carte bleue regardless of how much money you actually have left in your account because your bottom line wont change until the end of the month. This is called a Debit Differé and almost everyone I know handles their finances this way. This means the bank is not lending you any money, it’s just lending you time.

For some reason, I have a hard time adjusting to this.

For me it's simple: when you pay for something with a debit card, you see the charge on your bank account the next day and you can check your current saldo (bottom line) at any given day of the month and thus be able to adjust your spending accordingly. And if you pay for something with a credit card, then you’re using borrowed money not your own, which I’ve always found pretty scary.

But paying with your own money, except not actually seeing it gone until the end of the month (and thus having to continually be calculating how much money you actually have -or don't- left) is something I still can’t get used to.

So after much debating and whining and pleading, I’ve finally convinced hubby to change our carte bleue to debit immédiat mode, which is the classical debit (you pay as you buy). He’s been against this for a long time but when I flat out asked him to explain to me in what way it was better paying later rather than sooner (I mean, it’s not like we’re suddenly going to find additional money under a rock between Paycheck 1 and Paycheck 2 right?) he finally gave in.

So, from now on our finances are on Payday mode: we earn, we spend, we save what’s left… without all the calculations in between.


Fned.