6 ms·

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

by 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.
  - anaerobicover 6y ago
    > 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. Generally true, but I have suspected that banks have begun getting payments from the payment processors, however (Mastercard/Visa). Most recent time I created my checking account the bank nearly insisted that I have a debit card although I strongly preferred to have only ATM access with it. Additionally the largest banks have most certainly figured out squeezing fees from people for use of the debit cards.
- diggernet 6y ago
  > it might take time, but you'll get your money back. And that's really the key difference between credit and debit. With a debit card, if there is fraud, the money is gone from your checking account. You will get it back, but it will take time, and in the meantime you may be suffering from all kinds of unpleasant effects of having a suddenly and unexpectedly empty checking account. With a credit card, if there is fraud, you have a debt on the books. You will get it removed, but it will take time, and in the meantime you still have all your money.
  - sofixa 6y ago
    > You will get it back, but it will take time, and in the meantime you may be suffering from all kinds of unpleasant effects of having a suddenly and unexpectedly empty checking account. That's what card limits are for. Even on my high-level Visa Premier card, the limit is 1k per day, and there are also per-transaction and per month limits. I can increase it via my bank's app if i plan on making a big purchase with the card, so IMHO it's a good solution for that problem.
    - ImPostingOnHN 6y ago
      The current solution obviates the additional work requirement of changing credit limits before purchase, so IMHO it's a better solution for that problem. If you're protected from your credit card being used on a $5,000 purchase, why would you lower the credit limit below that?
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."

by luma 6y ago

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.
- anaerobicover 6y ago
  > 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. Generally true, but I have suspected that banks have begun getting payments from the payment processors, however (Mastercard/Visa). Most recent time I created my checking account the bank nearly insisted that I have a debit card although I strongly preferred to have only ATM access with it. Additionally the largest banks have most certainly figured out squeezing fees from people for use of the debit cards.
diggernet 6y ago
> it might take time, but you'll get your money back. And that's really the key difference between credit and debit. With a debit card, if there is fraud, the money is gone from your checking account. You will get it back, but it will take time, and in the meantime you may be suffering from all kinds of unpleasant effects of having a suddenly and unexpectedly empty checking account. With a credit card, if there is fraud, you have a debt on the books. You will get it removed, but it will take time, and in the meantime you still have all your money.
- sofixa 6y ago
  > You will get it back, but it will take time, and in the meantime you may be suffering from all kinds of unpleasant effects of having a suddenly and unexpectedly empty checking account. That's what card limits are for. Even on my high-level Visa Premier card, the limit is 1k per day, and there are also per-transaction and per month limits. I can increase it via my bank's app if i plan on making a big purchase with the card, so IMHO it's a good solution for that problem.
  - ImPostingOnHN 6y ago
    The current solution obviates the additional work requirement of changing credit limits before purchase, so IMHO it's a better solution for that problem. If you're protected from your credit card being used on a $5,000 purchase, why would you lower the credit limit below that?

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."