4 ms·

> Credit cards in the USA are backed by very strong consumer protection laws. That is why you can mindlessly give one to wait staff at a restaurant who will dis

by jwr 6y ago

> Credit cards in the USA are backed by very strong consumer protection laws. That is why you can mindlessly give one to wait staff at a restaurant who will disappear with it for an extended amount of time, while in any other country that would be unimaginable. But how is this specific to "credit" cards? Don't debit cards get the same protection? The point here is that in the US one needs to have "credit history" in order to do things like rent an apartment, which is not a thing in the EU. As to security, the EU has largely gotten around the problem by implementing modern payment systems. In Poland no waiter will "disappear" with your card, they will bring a mobile terminal to the table, so that you can use your (contactless) card. In fact, living in Poland currently, I can't remember the last time I used a physical card anywhere. For the last two years or so I've only been carrying my phone with me, no wallet at all.

naniwaduni 6y ago
There is a very strong, very simple alignment of incentives that you'd think shouldn't really matter, but makes a huge difference: with credit, the burden is on the bank to collect money from you.
luma 6y ago
In the US debit cards work completely differently than CCs. In the event of fraud, the debit card holder is technically responsible for any losses. Your bank might step in to deal with that, or they might not. With a credit card company it's always the card issuing company's problem to address.
- sofixa 6y ago
  > In the US debit cards work completely differently than CCs. In the event of fraud, the debit card holder is technically responsible for any losses That seems very backward. And as you might suppose, really isn't the case in the EU. Fraud is fraud, and it might take time, but you'll get your money back.
  - Frost1x 6y ago
    The US is all about risk, money, and power transfer. Maybe everywhere is but I've only lived in the US. In the case of of CCs, there is an assumption that a certain portion of people will take high interest credit offered by the cards and that they will incur interest and have to pay that. The rates are often incredibly high, something like 20%+. To encourage more people to use these cards to increase the population and likihood people will be forced to pay these interests, CC companies offer incentives like cash back, no-interest periods to encourage borrowing behavior or misunderstanding of the boundary time for payments for at least one hefty interest payment, etc. They also offer an alternative to people who have difficulty receiving a loan for some item any other way. Debit cards on the other hand are offered by traditional banks. Many of these are free and associated with free or nearly free accounts (usually requiring your regular income deposited or a minimum balance they can invest elsewhere while you let it sit idle). Banks are not incentivized for you to spend money. It's in their interest for your money to sit in your account theyre investing elsewhere or for them to charge you various service fees. They're less inclined to give you incentives and protections to use these cards. If consumers get to a point of using credit cards in a responsible manner (essentially more people exploiting their benefits than CC providers exploiting them), you'll see these features and protections slowly peeled away. Many cards used to even offer price protection where if an item changed prices than the price point you purchased at, the CC company would refund you the difference. Obviously enough people took advantage of this vs the pool of people paying high interest that these features slowly peeled away. Time and value limits were introduced and tightened, card providers began to remove these, and now few if any cards provide this. This is one consumer feature/perk that used to exist that no longer exists because the normalized increasingly responsible use of cards by consumers. There are several more (rental protection, road side protection, flight delay protections, and a host of perks). Now you often have to pay a fee for a card that has such perks and need to be sure your spending rates are high enough to warrant the fee. Payment systems aren't about payment systems and detecting fraud, they're about building complex systems people want to participate in under the assumption the complex system will at large extract wealth from the people using the system, not the other way around. Even something as trivial as just paying for exchange of services/good would be straightforward but it's not, it's gamed to pass risks, extract money, and transfer power.
- jdofaz 6y ago
  I don't use my debit card because I don't want to fight to get my money back, but that doesn't mean you are liable for fraud. https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-cr... "If someone makes unauthorized transactions with your debit card number, but your card is not lost, you are not liable for those transactions if you report them within 60 days of your statement being sent to you."
op00to 6y ago
No. Debit cards do not get the same protection. I have never had my credit checked for an apartment. I too only use my phone for most credit card transactions.
herbstein 6y ago
> In fact, living in Poland currently, I can't remember the last time I used a physical card anywhere. For the last two years or so I've only been carrying my phone with me, no wallet at all. Here in Denmark we recently got an official digital drivers license. You verify your identity with the government issued 2FA system, scan the NFC chip in your (non-expired) passport, and you're golden. The digital license is as valid as the physical license. Couple this with NFC payment being a requirement anywhere that takes payment, the banks having developed a way of transferring money between accounts in different banks instantly based on just a phone number, and the digital drivers license, there's never a need to have my wallet on me. At the moment I'm not even sure where it is -- it's somewhere in the apartment.
- jwr 6y ago
  Yes, the same thing exists here. My national id as well as driver's licence are stored on my phone. Forgot to mention it.
teachingassist 6y ago
Credit cards also have stronger consumer protections than debit cards in several European countries. e.g. https://www.moneyadviceservice.org.uk/en/articles/how-youre-protected-when-you-pay-by-card https://www.moneyadviceservice.org.uk/en/articles/how-youre-...
jjav 6y ago
> But how is this specific to "credit" cards? Don't debit cards get the same protection? No, they don't. It gets confusing because many banks do offer protections against debit card fraud, but that's entirely up to the bank and its terms of service (which of course they can change at any moment). The credit card protections are by regulation, so you can count on them regardless of bank and the banks can't change them. A debit card is a straight siphon into your bank account. The bank may or may not help in the case of fraud, depending how much they feel like retaining your business. A credit card is a strong firewall between expenses and your money, both in implementation (it's a separate account after all) and regulation (you're not liable for fraudulent use). So, in the USA always use credit cards. Avoid debit cards. I try to not have any debit cards (it can't be exploited if it doesn't exist) although lately it has been more difficult since banks insist on sending me debit cards I don't want. So I store them away, will never carry or use them.

by jwr 6y ago

naniwaduni 6y ago

There is a very strong, very simple alignment of incentives that you'd think shouldn't really matter, but makes a huge difference: with credit, the burden is on the bank to collect money from you.

luma 6y ago

In the US debit cards work completely differently than CCs. In the event of fraud, the debit card holder is technically responsible for any losses. Your bank might step in to deal with that, or they might not. With a credit card company it's always the card issuing company's problem to address.

sofixa 6y ago
> In the US debit cards work completely differently than CCs. In the event of fraud, the debit card holder is technically responsible for any losses That seems very backward. And as you might suppose, really isn't the case in the EU. Fraud is fraud, and it might take time, but you'll get your money back.
- Frost1x 6y ago
  The US is all about risk, money, and power transfer. Maybe everywhere is but I've only lived in the US. In the case of of CCs, there is an assumption that a certain portion of people will take high interest credit offered by the cards and that they will incur interest and have to pay that. The rates are often incredibly high, something like 20%+. To encourage more people to use these cards to increase the population and likihood people will be forced to pay these interests, CC companies offer incentives like cash back, no-interest periods to encourage borrowing behavior or misunderstanding of the boundary time for payments for at least one hefty interest payment, etc. They also offer an alternative to people who have difficulty receiving a loan for some item any other way. Debit cards on the other hand are offered by traditional banks. Many of these are free and associated with free or nearly free accounts (usually requiring your regular income deposited or a minimum balance they can invest elsewhere while you let it sit idle). Banks are not incentivized for you to spend money. It's in their interest for your money to sit in your account theyre investing elsewhere or for them to charge you various service fees. They're less inclined to give you incentives and protections to use these cards. If consumers get to a point of using credit cards in a responsible manner (essentially more people exploiting their benefits than CC providers exploiting them), you'll see these features and protections slowly peeled away. Many cards used to even offer price protection where if an item changed prices than the price point you purchased at, the CC company would refund you the difference. Obviously enough people took advantage of this vs the pool of people paying high interest that these features slowly peeled away. Time and value limits were introduced and tightened, card providers began to remove these, and now few if any cards provide this. This is one consumer feature/perk that used to exist that no longer exists because the normalized increasingly responsible use of cards by consumers. There are several more (rental protection, road side protection, flight delay protections, and a host of perks). Now you often have to pay a fee for a card that has such perks and need to be sure your spending rates are high enough to warrant the fee. Payment systems aren't about payment systems and detecting fraud, they're about building complex systems people want to participate in under the assumption the complex system will at large extract wealth from the people using the system, not the other way around. Even something as trivial as just paying for exchange of services/good would be straightforward but it's not, it's gamed to pass risks, extract money, and transfer power.
jdofaz 6y ago
I don't use my debit card because I don't want to fight to get my money back, but that doesn't mean you are liable for fraud. https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-cr... "If someone makes unauthorized transactions with your debit card number, but your card is not lost, you are not liable for those transactions if you report them within 60 days of your statement being sent to you."

op00to 6y ago

No. Debit cards do not get the same protection. I have never had my credit checked for an apartment. I too only use my phone for most credit card transactions.

herbstein 6y ago

> In fact, living in Poland currently, I can't remember the last time I used a physical card anywhere. For the last two years or so I've only been carrying my phone with me, no wallet at all. Here in Denmark we recently got an official digital drivers license. You verify your identity with the government issued 2FA system, scan the NFC chip in your (non-expired) passport, and you're golden. The digital license is as valid as the physical license. Couple this with NFC payment being a requirement anywhere that takes payment, the banks having developed a way of transferring money between accounts in different banks instantly based on just a phone number, and the digital drivers license, there's never a need to have my wallet on me. At the moment I'm not even sure where it is -- it's somewhere in the apartment.

jwr 6y ago
Yes, the same thing exists here. My national id as well as driver's licence are stored on my phone. Forgot to mention it.

teachingassist 6y ago

Credit cards also have stronger consumer protections than debit cards in several European countries. e.g. https://www.moneyadviceservice.org.uk/en/articles/how-youre-protected-when-you-pay-by-card https://www.moneyadviceservice.org.uk/en/articles/how-youre-...

jjav 6y ago

> But how is this specific to "credit" cards? Don't debit cards get the same protection? No, they don't. It gets confusing because many banks do offer protections against debit card fraud, but that's entirely up to the bank and its terms of service (which of course they can change at any moment). The credit card protections are by regulation, so you can count on them regardless of bank and the banks can't change them. A debit card is a straight siphon into your bank account. The bank may or may not help in the case of fraud, depending how much they feel like retaining your business. A credit card is a strong firewall between expenses and your money, both in implementation (it's a separate account after all) and regulation (you're not liable for fraudulent use). So, in the USA always use credit cards. Avoid debit cards. I try to not have any debit cards (it can't be exploited if it doesn't exist) although lately it has been more difficult since banks insist on sending me debit cards I don't want. So I store them away, will never carry or use them.