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> The concept of a credit card is an anachronism No, it isn't. Having a financial intermediary between you and entities you buy things from is a genuine benefi

by pdonis 4y ago

> The concept of a credit card is an anachronism No, it isn't. Having a financial intermediary between you and entities you buy things from is a genuine benefit to you as a consumer: it means you don't have to give everyone you buy things from direct access to your bank account, as a debit card does. It also means that if your credit card info is stolen, you have a third party that deals with the issues involved instead of you, and you don't have your bank account funds tied up while the issue is being resolved, as you would with a debit card. Of course, in a sane world this genuine service would be sold as what it is--financial intermediation--and the market price of this service would be determined in a free market. It's quite true that we don't live in that sane world, but that doesn't mean financial intermediation isn't a genuine service that is worth having even in the insane world we actually live in. > In this day and age, there is no functional difference between a debit or a credit card Yes, there is, there is a huge functional difference. See above. Ask anyone who has had their debit card info stolen and had funds fraudulently taken direct from their bank account.

Nextgrid 4y ago
> it means you don't have to give everyone you buy things from direct access to your bank account, as a debit card does I disagree that this means "giving someone else access to all your money". First off, you're authorizing a single transaction, and second, your bank is still the one mediating the transaction - if you experience fraud, what's actually happening is that your bank is the one who got defrauded by someone pretending to be you (by stealing your card/PIN/etc) and fraudulently convinced the bank to give them your money. I disagree that a debit card doesn't involve financial intermediation. The bank is still the intermediary and holds the money, just that the hold duration is seconds instead of a month (well technically settlement or presentment happens a few days after authorization, but that's all transparent to the cardholder). There's no technical difference, the difference is purely regulatory and there's no reason the regulations can't be amended to give debit card holders the same protections as credit card holders. > Ask anyone who has had their debit card info stolen and had funds fraudulently taken direct from their bank account. I don't know about you but all instances of fraud I had on my debit cards have been resolved painlessly. Most fraud gets resolved by card network disputes which don't care about the card type. The only time credit cards get preferential treatment is when card network disputes fail and the law forces lenders (but not debit card issuers) to eat the fraudulent transaction anyway, but those instances are relatively rare.
- pdonis 4y ago
  > I disagree that this means "giving someone else access to all your money". It means giving someone the information that is required to withdraw money directly from your account. Yes, they're only supposed to withdraw the amount you specifically authorized for that transaction, but the fact remains that you have given them direct access to your account. The same risk exists when you write a check. Mitigating that risk by having a financial intermediary involved is, as I said, a genuine service. If you personally don't value that service, then of course you would not use it. But others do value it. > all instances of fraud I had on my debit cards have been resolved painlessly. That's fine, but I have known plenty of people who did not have the same painless experience.
- pdonis 4y ago
  > I disagree that a debit card doesn't involve financial intermediation. The bank is still the intermediary and holds the money But there's still only one transaction involved: the bank pays the merchant directly from your bank account. With a credit card, there are two transactions: the credit card company pays the merchant and you pay the credit card company in a separate transaction (and of course you pay once for multiple purchases made with the card). That's the intermediation that is not present with a debit card.
SergeAx 4y ago
I beleive it is a US thing - giving access to account with just a card number. I have numerous accounts in European banks, and all online transactions are protected via second factor - SMS to phone or mobile app push notif or TOTP.
- pdonis 4y ago
  Do you have checks in Europe? Do you get an SMS or push notification or TOTP request every time someone cashes a check you've written them? For cards, I agree 2FA for card transactions is not common in the US (I've never seen it). The US theory for cards appears to be to depend on chip cards, but of course that doesn't help with online transactions, only transactions where the card is physically present at the point of sale.
  - SergeAx 4y ago
    Never used a cheque in my entire life. Had couple of blanks when opened an account with BofA about 15 years ago, but didn't get the idea. For me cheques are something from Theodore Dreiser novels. I heard from friends in Israel that there's a fancy custom of writing 12 cheques to landlord when one rents an apartment dated for every month of the rent. This way you never see your landlord for the entire year, which is neat, can't argue with that.

by pdonis 4y ago

Nextgrid 4y ago

> it means you don't have to give everyone you buy things from direct access to your bank account, as a debit card does I disagree that this means "giving someone else access to all your money". First off, you're authorizing a single transaction, and second, your bank is still the one mediating the transaction - if you experience fraud, what's actually happening is that your bank is the one who got defrauded by someone pretending to be you (by stealing your card/PIN/etc) and fraudulently convinced the bank to give them your money. I disagree that a debit card doesn't involve financial intermediation. The bank is still the intermediary and holds the money, just that the hold duration is seconds instead of a month (well technically settlement or presentment happens a few days after authorization, but that's all transparent to the cardholder). There's no technical difference, the difference is purely regulatory and there's no reason the regulations can't be amended to give debit card holders the same protections as credit card holders. > Ask anyone who has had their debit card info stolen and had funds fraudulently taken direct from their bank account. I don't know about you but all instances of fraud I had on my debit cards have been resolved painlessly. Most fraud gets resolved by card network disputes which don't care about the card type. The only time credit cards get preferential treatment is when card network disputes fail and the law forces lenders (but not debit card issuers) to eat the fraudulent transaction anyway, but those instances are relatively rare.

pdonis 4y ago
> I disagree that this means "giving someone else access to all your money". It means giving someone the information that is required to withdraw money directly from your account. Yes, they're only supposed to withdraw the amount you specifically authorized for that transaction, but the fact remains that you have given them direct access to your account. The same risk exists when you write a check. Mitigating that risk by having a financial intermediary involved is, as I said, a genuine service. If you personally don't value that service, then of course you would not use it. But others do value it. > all instances of fraud I had on my debit cards have been resolved painlessly. That's fine, but I have known plenty of people who did not have the same painless experience.
pdonis 4y ago
> I disagree that a debit card doesn't involve financial intermediation. The bank is still the intermediary and holds the money But there's still only one transaction involved: the bank pays the merchant directly from your bank account. With a credit card, there are two transactions: the credit card company pays the merchant and you pay the credit card company in a separate transaction (and of course you pay once for multiple purchases made with the card). That's the intermediation that is not present with a debit card.

SergeAx 4y ago

I beleive it is a US thing - giving access to account with just a card number. I have numerous accounts in European banks, and all online transactions are protected via second factor - SMS to phone or mobile app push notif or TOTP.

pdonis 4y ago
Do you have checks in Europe? Do you get an SMS or push notification or TOTP request every time someone cashes a check you've written them? For cards, I agree 2FA for card transactions is not common in the US (I've never seen it). The US theory for cards appears to be to depend on chip cards, but of course that doesn't help with online transactions, only transactions where the card is physically present at the point of sale.
- SergeAx 4y ago
  Never used a cheque in my entire life. Had couple of blanks when opened an account with BofA about 15 years ago, but didn't get the idea. For me cheques are something from Theodore Dreiser novels. I heard from friends in Israel that there's a fancy custom of writing 12 cheques to landlord when one rents an apartment dated for every month of the rent. This way you never see your landlord for the entire year, which is neat, can't argue with that.