5 ms·
Seems that there's a lot of confusion between credit cards and debit cards and usage in Europe and US. In some countries (including the US), a credit card is a
by nicolas_t 10y ago
Seems that there's a lot of confusion between credit cards and debit cards and usage in Europe and US.
In some countries (including the US), a credit card is a card that you pay at the end of the month. You have a statement and you have to pay for that statement. If you so choose you can pay less and pay at least the "minimum payment", in that case you pay interest rate on the remaining money.
There are debit cards, with debit cards the amount is directly debited from your account as you use it.
Then in a lot of European countries, we have cards that we call credit cards which are actually deferred debit cards. The money you've spent is debited from your account on a fixed date at the end of the month. You have a credit line in that until it's debited at the end of the month, you're effectively borrowing money but since it debits your account, you're expected to pay it in full.
Often this is associated with overdraft facilities on the bank account which means that at the end of the month, if the money to pay the credit card bill is not your account, the account will be overdrawn and you will pay interest (which are similar to the interest rates for credit cards in the US, around 18%)...
So, the European system with deferred debit cards is different but in practice has a bit of the same issues with overpaying and high interest rates. It's just that the credit line is tied to the bank account and not the credit card.
- GordonS 10y ago> in a lot of European countries, we have cards that we call credit cards which are actually deferred debit cards. The money you've spent is debited from your account on a fixed date at the end of the month Interesting, I'm in the UK and have never heard of this kind of card.
- FooBarWidget 10y agoI am in the Netherlands and this is exactly how all of my credit cards work. I have never seen a credit card that does not work this way.
- gpvos 10y agoFor both credit cards issued by ING you can choose to pay only partly at the end of the month, and have revolving credit. Most people don't choose this though, as far as I know. I didn't check the other banks.
- goatforce5 10y agoElsewhere a 'deferred debit card' would be called a 'charge card' and were in widespread use before credit cards became popular. https://en.wikipedia.org/wiki/Charge_card https://en.wikipedia.org/wiki/Charge_card It seems as though credit cards (via the Barclaycard) became established in the UK before charge cards got a foothold: http://www.theukcardsassociation.org.uk/history_of_cards/index.asp http://www.theukcardsassociation.org.uk/history_of_cards/ind...
- Joe8Bit 10y agoAlso the UK, the only place where it's common is in corporate cards. The classic green corporate Amex uses this model, for instance.
- GordonS 10y agoAh, you're right - I actually have one and forgot that's how it works!
- apaprocki 10y agoIn the US, American Express is the famous example of this. The green, gold, and platinum cards are all "charge cards" and not credit cards. All the other types of cards (airline branded, Blue Sky/Cash, etc) are all classic credit cards. It was big news when AmEx started issuing regular credit cards since they were always charge-only.