6 ms·

In much of the world, the "credit card" payment goes through a pre-paid card. Then you're actually putting your own money on the line, and even if there's a gua

In much of the world, the "credit card" payment goes through a pre-paid card. Then you're actually putting your own money on the line, and even if there's a guarantee, it's a pain to actually go through the process of invoking it. If this is one of the best tools, then I'm really dismayed at the state of payments around the world. SEPA bank transfers are so much better, even if they have other problems.

Dalewyn 3y ago
Define "much of the world", because that is absolutely not how credit cards work. Paying with a credit card means your credit card company pays that charge for you. Yes, you are borrowing money from your credit card company. Once a month (or whatever your billing cycle is), you receive a statement showing all the charges on your credit card. The statement will also show any credits if applicable (eg: refunds). The sum of all charges and credits is called the balance. At this time, if you spot any suspicious or fraudulent charges on the statement, you call your credit card company as soon as possible to dispute those charges. If they are indeed fraudulent, those charges are reversed/removed. If the statement looks fine, you pay your credit card company whatever balance is shown on the statement. Note how your own personal money only comes into contact with the credit card at the time of paying off the charges on the credit card, and only after confirming the charges are legitimate. The credit card company has a vested interest in fighting fraud because it's their money on the line, not yours. This is why credit cards are considered safe and widely popular. Contrast debit cards and banks, where all charges on your debit card come into contact with your own personal money immediately. Banks don't have a vested interest because it's your money on the line, not their's, so they won't be nearly as enthusiastic about fighting fraud on your behalf.
- rhn_mk1 3y ago
  This is not how credit cards work, because the system of "credit card payment" is typically used with things other than credit cards. At least in Europe you go through extra expense and hassle to get a credit card, if you're even allowed.
  - Dalewyn 3y ago
    If someone says "credit cards" to mean things that aren't credit cards, that's not really my problem.
    - rhn_mk1 3y ago
      Let me put it in another way: there's no "credit card payment system" for payments over the internet. There's Visa, MasterCard, whatever other "card" system. Those don't just facilitate payments for credit cards, but also for other kinds of "cards", which, in my experience, are no less common. Talking about paying by card over the internet doesn't make sense without considering that hordes of people don't use credit cards for that.
- LeafItAlone 3y ago
  You’re definitely correct in how credit cards work, but I’d like to make one wording change: > Contrast debit cards and banks, where all charges on your debit card come into contact with your own personal money immediately. Banks don't have a vested interest because it's your money on the line, not their's, so they won't be nearly as enthusiastic about fighting fraud on your behalf. The credit card issuer may be a bank and for most new credit card holders, there’s a decent chance it is their main bank (e.g. BoA and Chase in the United States have many credit card products). Also, with debit cards, the federal Electronic Fund Transfer Act does limit liability for the card holder. Source: https://www.federalreserve.gov/boarddocs/caletters/2008/0807/08-07_attachment.pdf https://www.federalreserve.gov/boarddocs/caletters/2008/0807...
maccard 3y ago
Is it? Last time my card was used in an unauthorized way, one phone call to the bank locked the card and had a replacement the following day, and I got a letter a few weeks later for me to sign to confirm it was a fraudulent transaction, that was it.

Dalewyn 3y ago

Define "much of the world", because that is absolutely not how credit cards work. Paying with a credit card means your credit card company pays that charge for you. Yes, you are borrowing money from your credit card company. Once a month (or whatever your billing cycle is), you receive a statement showing all the charges on your credit card. The statement will also show any credits if applicable (eg: refunds). The sum of all charges and credits is called the balance. At this time, if you spot any suspicious or fraudulent charges on the statement, you call your credit card company as soon as possible to dispute those charges. If they are indeed fraudulent, those charges are reversed/removed. If the statement looks fine, you pay your credit card company whatever balance is shown on the statement. Note how your own personal money only comes into contact with the credit card at the time of paying off the charges on the credit card, and only after confirming the charges are legitimate. The credit card company has a vested interest in fighting fraud because it's their money on the line, not yours. This is why credit cards are considered safe and widely popular. Contrast debit cards and banks, where all charges on your debit card come into contact with your own personal money immediately. Banks don't have a vested interest because it's your money on the line, not their's, so they won't be nearly as enthusiastic about fighting fraud on your behalf.

rhn_mk1 3y ago
This is not how credit cards work, because the system of "credit card payment" is typically used with things other than credit cards. At least in Europe you go through extra expense and hassle to get a credit card, if you're even allowed.
- Dalewyn 3y ago
  If someone says "credit cards" to mean things that aren't credit cards, that's not really my problem.
  - rhn_mk1 3y ago
    Let me put it in another way: there's no "credit card payment system" for payments over the internet. There's Visa, MasterCard, whatever other "card" system. Those don't just facilitate payments for credit cards, but also for other kinds of "cards", which, in my experience, are no less common. Talking about paying by card over the internet doesn't make sense without considering that hordes of people don't use credit cards for that.
LeafItAlone 3y ago
You’re definitely correct in how credit cards work, but I’d like to make one wording change: > Contrast debit cards and banks, where all charges on your debit card come into contact with your own personal money immediately. Banks don't have a vested interest because it's your money on the line, not their's, so they won't be nearly as enthusiastic about fighting fraud on your behalf. The credit card issuer may be a bank and for most new credit card holders, there’s a decent chance it is their main bank (e.g. BoA and Chase in the United States have many credit card products). Also, with debit cards, the federal Electronic Fund Transfer Act does limit liability for the card holder. Source: https://www.federalreserve.gov/boarddocs/caletters/2008/0807/08-07_attachment.pdf https://www.federalreserve.gov/boarddocs/caletters/2008/0807...

maccard 3y ago

Is it? Last time my card was used in an unauthorized way, one phone call to the bank locked the card and had a replacement the following day, and I got a letter a few weeks later for me to sign to confirm it was a fraudulent transaction, that was it.