4 ms·

That’s why I’ve never understood the utility of debit cards. When a debit card is abused fraudulently I am out the money. When a credit card is abused fraudulen

by JackFr 6y ago

That’s why I’ve never understood the utility of debit cards. When a debit card is abused fraudulently I am out the money. When a credit card is abused fraudulently the bank is out the money. In both cases neither the bank nor I have done anything wrong. We’re both literally victims of a crime. And through the payments system and the justice system we’ll hopefully be made whole in the end. But the difference is the incentives. When I lose the money the bank has less of an incentive to rectify the situation.

snazz 6y ago
Some people with particularly bad spending habits use debit cards as a way to enforce self-control, but there are probably much better ways of achieving that. Teenagers also use them when paying with their own money because you can't have a credit card until you're 18 unless it's an authorized user card on your parents' account. Costco used to make you pay with a debit card, if I remember correctly. But those are pretty much edge cases. Credit builder and secured credit cards exist for people with poor or no credit.
- yencabulator 6y ago
  > Costco used to make you pay with a debit card, if I remember correctly. Costco, gas stations, and some mom & pop shops really want to save on that credit card processing fee. Personally, I consider missing out on the cash discount at a gas station a convenience & fraud protection fee.
- brewdad 6y ago
  Costco used to have an exclusivity deal with AmEx that prevented other credit cards from being accepted. They did accept debit cards however. They now have a deal with Visa, along with their own branded Visa card but will accept any bank's Visa card.
vaccinator 6y ago
I just disputed an ACH transfer and they refunded it ... That is probably even less secure then a debit card?
ZainRiz 6y ago
Venmo fraud is even worse. My sister got scammed out of thousands of dollars recently and her bank just said "pay up" I wrote about the story here: https://www.zainrizvi.io/blog/how-banks-help-scammers-with-their-bad-ui/ https://www.zainrizvi.io/blog/how-banks-help-scammers-with-t...
- TylerE 6y ago
  That's a bit of a different case. As cruel as it sounds, your sister performed a legitimate transaction.
  - variable11 6y ago
    There's literally no way anyone can argue what the banks are doing in cases like these are in anyway legitimate, moral, or acceptable.
  - paultopia 6y ago
    I'm not sure I agree. How should anyone know that it might take six months for their bank to know whether a check is real or not? Does anyone who isn't actually a bank employee know that? (What percentage even of bank employees know that?) It seems to me that a person ought to be able to reasonably rely on a bank acting like a check has cleared, at least after some clearly stated period of time.
    - TylerE 6y ago
      As far as the bank and the law is concerned, they are two separate issues. There isn’t a dependency. The legitimate account holder said “Send $x from my account to y” and the bank did. There was no fraud in that transaction. As for your second point - funds are required to be available before the check clears by federal law. Complain to your congresscritter, not the bank. Not sure why I’m getting downvoted for stating simple facts...
      - jlgaddis 6y ago
        > Not sure why I’m getting downvoted for stating simple facts... Welcome to HN.
ALittleLight 6y ago
That's not true of debit cards. If the card is used fraudulently you just dispute the charges the same as you would with a credit card. The bank reverses the charge and the vendor has the opportunity to sue you if you really did make the alleged charges.
- TylerE 6y ago
  The distinction is this. Your card gets stolen. Scammer empties out the account. With a credit card, transactions against the card will get declined after it maxes out (if the fraud checks don't kick in sooner). You report the theft. Everything solves itself quickly. A minor inconvenience at worst. When your debit card gets stolen, that's YOUR money going out, then your rent check bounces, and it takes weeks to get the money back, and in the meantime, YOU HAVE NO MONEY.

by JackFr 6y ago

snazz 6y ago

Some people with particularly bad spending habits use debit cards as a way to enforce self-control, but there are probably much better ways of achieving that. Teenagers also use them when paying with their own money because you can't have a credit card until you're 18 unless it's an authorized user card on your parents' account. Costco used to make you pay with a debit card, if I remember correctly. But those are pretty much edge cases. Credit builder and secured credit cards exist for people with poor or no credit.

yencabulator 6y ago
> Costco used to make you pay with a debit card, if I remember correctly. Costco, gas stations, and some mom & pop shops really want to save on that credit card processing fee. Personally, I consider missing out on the cash discount at a gas station a convenience & fraud protection fee.
brewdad 6y ago
Costco used to have an exclusivity deal with AmEx that prevented other credit cards from being accepted. They did accept debit cards however. They now have a deal with Visa, along with their own branded Visa card but will accept any bank's Visa card.

vaccinator 6y ago

I just disputed an ACH transfer and they refunded it ... That is probably even less secure then a debit card?

ZainRiz 6y ago

Venmo fraud is even worse. My sister got scammed out of thousands of dollars recently and her bank just said "pay up" I wrote about the story here: https://www.zainrizvi.io/blog/how-banks-help-scammers-with-their-bad-ui/ https://www.zainrizvi.io/blog/how-banks-help-scammers-with-t...

TylerE 6y ago
That's a bit of a different case. As cruel as it sounds, your sister performed a legitimate transaction.
- variable11 6y ago
  There's literally no way anyone can argue what the banks are doing in cases like these are in anyway legitimate, moral, or acceptable.
- paultopia 6y ago
  I'm not sure I agree. How should anyone know that it might take six months for their bank to know whether a check is real or not? Does anyone who isn't actually a bank employee know that? (What percentage even of bank employees know that?) It seems to me that a person ought to be able to reasonably rely on a bank acting like a check has cleared, at least after some clearly stated period of time.
  - TylerE 6y ago
    As far as the bank and the law is concerned, they are two separate issues. There isn’t a dependency. The legitimate account holder said “Send $x from my account to y” and the bank did. There was no fraud in that transaction. As for your second point - funds are required to be available before the check clears by federal law. Complain to your congresscritter, not the bank. Not sure why I’m getting downvoted for stating simple facts...
    - jlgaddis 6y ago
      > Not sure why I’m getting downvoted for stating simple facts... Welcome to HN.

ALittleLight 6y ago

That's not true of debit cards. If the card is used fraudulently you just dispute the charges the same as you would with a credit card. The bank reverses the charge and the vendor has the opportunity to sue you if you really did make the alleged charges.

TylerE 6y ago
The distinction is this. Your card gets stolen. Scammer empties out the account. With a credit card, transactions against the card will get declined after it maxes out (if the fraud checks don't kick in sooner). You report the theft. Everything solves itself quickly. A minor inconvenience at worst. When your debit card gets stolen, that's YOUR money going out, then your rent check bounces, and it takes weeks to get the money back, and in the meantime, YOU HAVE NO MONEY.