3 ms·

Why would you use a debit card, which directly takes money out of your banking account, when you can use a credit card which increases a number owed against you

by fryguy 10y ago

Why would you use a debit card, which directly takes money out of your banking account, when you can use a credit card which increases a number owed against you? The former can cause lots of money in overdrawn bank accounts, while the latter will only cause the transaction to be declined. Also debit causes you to have to pay the fee, while credit forces that on the merchant. Almost everything in the US is done with a credit card (through VISA et al networks). Most people's debit cards go through the same networks. If by DD you mean direct debit through the banks, that's called ACH here and is pretty awful with respect to fraud since you have to give your bank account number, and transactions take several days to go through.

david-given 10y ago
Debit cards don't work like that in the UK --- they have similar levels of protection to credit cards (although this varies a bit from vendor to vendor). Credit card fees are not forced to the merchant and frequently you have to pay them yourself, and they're considerably more than the fee for a debit card. You can't become overdrawn using one (subject to propagation delays, of course). Direct Debit is very common, and is covered under legal guarantees --- companies using it must stand indemnity. There's frequently a discount for paying by direct debit. Also, I'm not clear on why is giving your bank account number a problem with regard to fraud? At least here, you can't use it to do anything other than make deposits (and you still need a sort code number for that as well).
- weavie 10y ago
  Jeremy Clarkson would disagree - https://www.theguardian.com/money/2008/jan/07/personalfinancenews.scamsandfraud https://www.theguardian.com/money/2008/jan/07/personalfinanc...
  - oarsinsync 10y ago
    And while he was inconvenienced by this, he was entitled to an immediate refund (which he opted not to claim given the relatively small amount involved and the beneficiary being a charity) https://www.directdebit.co.uk/DirectDebitExplained/Pages/Organisationunknown.aspx https://www.directdebit.co.uk/DirectDebitExplained/Pages/Org... > Whilst the copy is being obtained you are entitled to an immediate refund of the amount debited from your bank under the Direct Debit Guarantee.
dingaling 10y ago
> Also debit causes you to have to pay the fee, while credit forces that on the merchant. Usually in Europe it's the contrary; there is no separate fee for using a debit card, whereas the credit card fees are inflated and passed-on to the customer. For example FlyBE, a UK airline charges, 3% of the transaction total for credit card but zero for debit. Ryanair and Easyjet charge 2% for credit cards. Even worse, British Airways charges a fixed-fee per passenger.
gambiting 10y ago
Wait, what? It's the exact opposite of what you described! If you don't have money in your account, a debit card will just get declined. No fee to pay, no penalty, nothing - transaction just gets declined and that's it. Debit cards are also free to use in most places, while using a Credit Card has a 2-4% extra fee. Debit cards are free to issue, while Credit Cards usually have a yearly fee. Is it just completely the other way around in the US?
- oarsinsync 10y ago
  Which bank are you with? Most UK banks will gladly allow transactions on debit cards to go through, resulting in your account being hit with overdraft fees, the size of which vary depending on whether the overdraft was pre-agreed, exceeded, or entirely unarranged. Unfortunately, the prevailing attitude in most UK banks that I've seen is one to look to profit from transactions rather than protect their clients. Unarranged overdrafts are fantastic money makers in that regard.
  - OJFord 10y ago
    Sure, if you have an overdraft. But parent commenter's point was that if you do this with a credit card you could be completely unable to pay - if, for example, you have a single bank account with: (balance + overdraft) < minimum payment for credit card This can't happen with a debit card, since it will decline the payment, in the same way it would if you tried to use it to pay off a credit card bill of the same amount per above.
  - gambiting 10y ago
    I'm with Barclays, and I don't have any overdraft. The only way I can go into an unarranged overdraft is if I run out of funds in between the transaction being approved and actually clearing - if I don't have enough funds at the moment when I use the card, the card just gets declined.
  - makomk 10y ago
    After US banks were hit with restrictions on unwanted overdrafts, I believe they started charging fees to reject transactions due to insufficient funds too.

by fryguy 10y ago

david-given 10y ago

Debit cards don't work like that in the UK --- they have similar levels of protection to credit cards (although this varies a bit from vendor to vendor). Credit card fees are not forced to the merchant and frequently you have to pay them yourself, and they're considerably more than the fee for a debit card. You can't become overdrawn using one (subject to propagation delays, of course). Direct Debit is very common, and is covered under legal guarantees --- companies using it must stand indemnity. There's frequently a discount for paying by direct debit. Also, I'm not clear on why is giving your bank account number a problem with regard to fraud? At least here, you can't use it to do anything other than make deposits (and you still need a sort code number for that as well).

weavie 10y ago
Jeremy Clarkson would disagree - https://www.theguardian.com/money/2008/jan/07/personalfinancenews.scamsandfraud https://www.theguardian.com/money/2008/jan/07/personalfinanc...
- oarsinsync 10y ago
  And while he was inconvenienced by this, he was entitled to an immediate refund (which he opted not to claim given the relatively small amount involved and the beneficiary being a charity) https://www.directdebit.co.uk/DirectDebitExplained/Pages/Organisationunknown.aspx https://www.directdebit.co.uk/DirectDebitExplained/Pages/Org... > Whilst the copy is being obtained you are entitled to an immediate refund of the amount debited from your bank under the Direct Debit Guarantee.

dingaling 10y ago

> Also debit causes you to have to pay the fee, while credit forces that on the merchant. Usually in Europe it's the contrary; there is no separate fee for using a debit card, whereas the credit card fees are inflated and passed-on to the customer. For example FlyBE, a UK airline charges, 3% of the transaction total for credit card but zero for debit. Ryanair and Easyjet charge 2% for credit cards. Even worse, British Airways charges a fixed-fee per passenger.

gambiting 10y ago

Wait, what? It's the exact opposite of what you described! If you don't have money in your account, a debit card will just get declined. No fee to pay, no penalty, nothing - transaction just gets declined and that's it. Debit cards are also free to use in most places, while using a Credit Card has a 2-4% extra fee. Debit cards are free to issue, while Credit Cards usually have a yearly fee. Is it just completely the other way around in the US?

oarsinsync 10y ago
Which bank are you with? Most UK banks will gladly allow transactions on debit cards to go through, resulting in your account being hit with overdraft fees, the size of which vary depending on whether the overdraft was pre-agreed, exceeded, or entirely unarranged. Unfortunately, the prevailing attitude in most UK banks that I've seen is one to look to profit from transactions rather than protect their clients. Unarranged overdrafts are fantastic money makers in that regard.
- OJFord 10y ago
  Sure, if you have an overdraft. But parent commenter's point was that if you do this with a credit card you could be completely unable to pay - if, for example, you have a single bank account with: (balance + overdraft) < minimum payment for credit card This can't happen with a debit card, since it will decline the payment, in the same way it would if you tried to use it to pay off a credit card bill of the same amount per above.
- gambiting 10y ago
  I'm with Barclays, and I don't have any overdraft. The only way I can go into an unarranged overdraft is if I run out of funds in between the transaction being approved and actually clearing - if I don't have enough funds at the moment when I use the card, the card just gets declined.
- makomk 10y ago
  After US banks were hit with restrictions on unwanted overdrafts, I believe they started charging fees to reject transactions due to insufficient funds too.