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I'm not very familiar with restrictions on credit card purchases - are there other high-risk purchases that are routinely blocked on credit cards? I understand

I'm not very familiar with restrictions on credit card purchases - are there other high-risk purchases that are routinely blocked on credit cards? I understand the stated reasoning, but if this is the first such restriction (again, I don't know if it is), it's a pretty remarkable deviation relative to most credit card policies, i.e. we will happily finance whatever ridiculous decisions you choose to make. I wonder if they are seeing spiking default rates?

pyoung 9y ago
Not 100% on this, but I don't think you can use a cc to buy lotto tickets.
- legohead 9y ago
  Depends on the State. In Oklahoma, it wasn't allowed. In California, you can.
  - dragonwriter 9y ago
    > Depends on the State. In Oklahoma, it wasn't allowed. In California, you can. Aside from state rules, some cards prohibit it, much like this new restriction on cryptocurrency. Also, CA is one of the states which prohibits this.
empath75 9y ago
I’m guessing a shitload of people maxed out their cards and bought coins at $20k and tried to initiate charge backs.
- jhwang5 9y ago
  this
  - dang 9y ago
    Could you please stop posting unsubstantive comments to Hacker News? Please see this explanation, which I just posted in a similar situation: https://news.ycombinator.com/item?id=16300163 https://news.ycombinator.com/item?id=16300163.
saryant 9y ago
Purchasing high volumes of gift cards or other cash equivalents will often get you shut down. Do this too much with Chase and you'll end up blacklisted.
- pvg 9y ago
  Really? They're sold in volume for people to use in rewards and promotions programs, I'm assuming this doesn't involve showing up at the gift card mill with a chest of doubloons. How does that work?
solotronics 9y ago
its because of fraud. with crypto once you have the coin there is no equivalent of a chargeback. if you use a stolen credit card to buy something you have to have somewhere to ship it, therefore they can find the thief. with cryptocurrencies they just have to take a loss and open a new card. this is why credit/debit cards security model is absolute shit and should be illegal.
- TheSpiceIsLife 9y ago
  I don't understand how: > if you use a stolen credit card to buy something you have to have somewhere to ship it, therefore they can find the thief. with cryptocurrencies they just have to take a loss and open a new card. Necessarily results in: > credit/debit cards security model is absolute shit and should be illegal. Can you describe a comprehensive alternative that would, at least in theory, be better. As an analogy: if I come in to your house and steal your gold bullion while you're not looking, leaving little trace of my presence, does that mean the security model of houses is absolute shit and should be illegal?
  - iaw 9y ago
    Nope, but it does mean that your insurer will not be covering you for your lost gold bullion because there are limitations in place. The option for the credit card issuers is to: a) stop offering chargebacks for crypto purchases b) stop allowing crypto purchases They opted for 'b' because it's easier.
    - pjc50 9y ago
      a) is illegal in most jurisdictions because of the way credit law works; the card companies can't collect on a debt to them for a product or service that wasn't delivered. (I suppose they could eat the cost themselves, but I can't see that happening)
ceejayoz 9y ago
Gambling often has restrictions - it may be forbidden entirely, or processed as a "cash advance". Porn sites have a really hard time finding payment processors, due to the high rates of chargebacks.
dragonwriter 9y ago
> I'm not very familiar with restrictions on credit card purchases - are there other high-risk purchases that are routinely blocked on credit cards? Yes; some examples: https://www.bankrate.com/finance/credit-cards/naughty-things-credit-card-wont-buy-1.aspx https://www.bankrate.com/finance/credit-cards/naughty-things...
pjc50 9y ago
> other high-risk purchases that are routinely blocked on credit cards Normally the blocking is applied to merchants, rather than visible to the customers, but yes. Ironically this kind of thing used to be cited as a reason for bitcoin adoption.

pyoung 9y ago

Not 100% on this, but I don't think you can use a cc to buy lotto tickets.

legohead 9y ago
Depends on the State. In Oklahoma, it wasn't allowed. In California, you can.
- dragonwriter 9y ago
  > Depends on the State. In Oklahoma, it wasn't allowed. In California, you can. Aside from state rules, some cards prohibit it, much like this new restriction on cryptocurrency. Also, CA is one of the states which prohibits this.

empath75 9y ago

I’m guessing a shitload of people maxed out their cards and bought coins at $20k and tried to initiate charge backs.

jhwang5 9y ago
this
- dang 9y ago
  Could you please stop posting unsubstantive comments to Hacker News? Please see this explanation, which I just posted in a similar situation: https://news.ycombinator.com/item?id=16300163 https://news.ycombinator.com/item?id=16300163.

saryant 9y ago

Purchasing high volumes of gift cards or other cash equivalents will often get you shut down. Do this too much with Chase and you'll end up blacklisted.

pvg 9y ago
Really? They're sold in volume for people to use in rewards and promotions programs, I'm assuming this doesn't involve showing up at the gift card mill with a chest of doubloons. How does that work?

solotronics 9y ago

its because of fraud. with crypto once you have the coin there is no equivalent of a chargeback. if you use a stolen credit card to buy something you have to have somewhere to ship it, therefore they can find the thief. with cryptocurrencies they just have to take a loss and open a new card. this is why credit/debit cards security model is absolute shit and should be illegal.

TheSpiceIsLife 9y ago
I don't understand how: > if you use a stolen credit card to buy something you have to have somewhere to ship it, therefore they can find the thief. with cryptocurrencies they just have to take a loss and open a new card. Necessarily results in: > credit/debit cards security model is absolute shit and should be illegal. Can you describe a comprehensive alternative that would, at least in theory, be better. As an analogy: if I come in to your house and steal your gold bullion while you're not looking, leaving little trace of my presence, does that mean the security model of houses is absolute shit and should be illegal?
- iaw 9y ago
  Nope, but it does mean that your insurer will not be covering you for your lost gold bullion because there are limitations in place. The option for the credit card issuers is to: a) stop offering chargebacks for crypto purchases b) stop allowing crypto purchases They opted for 'b' because it's easier.
  - pjc50 9y ago
    a) is illegal in most jurisdictions because of the way credit law works; the card companies can't collect on a debt to them for a product or service that wasn't delivered. (I suppose they could eat the cost themselves, but I can't see that happening)

ceejayoz 9y ago

Gambling often has restrictions - it may be forbidden entirely, or processed as a "cash advance". Porn sites have a really hard time finding payment processors, due to the high rates of chargebacks.

dragonwriter 9y ago

> I'm not very familiar with restrictions on credit card purchases - are there other high-risk purchases that are routinely blocked on credit cards? Yes; some examples: https://www.bankrate.com/finance/credit-cards/naughty-things-credit-card-wont-buy-1.aspx https://www.bankrate.com/finance/credit-cards/naughty-things...

pjc50 9y ago

> other high-risk purchases that are routinely blocked on credit cards Normally the blocking is applied to merchants, rather than visible to the customers, but yes. Ironically this kind of thing used to be cited as a reason for bitcoin adoption.