[is0tope]

While I see your logic, ultimately using a credit card makes a lot of sense as long as you pay it off on time. Not only do you get the (small) benefits of the cashback or points, but you have added fraud protection also.

Not sure how it is where you are, but where I am the payment is automatically done every month from your bank account. There is 0 chance of missing a payment, as long as you have a sufficiently positive floating balance in your account. If someone do not, then I would question their suitability for a credit card in the first place.

[Nextgrid]

> Not only do you get the (small) benefits of the cashback or points

Maybe in the US - in Europe where interchange is capped, credit card rewards aren't worth it. Not to mention, I like my privacy and don't want to deal with any rewards or offers programs anyway.

> but you have added fraud protection also.

In practice, all the fraud I've been victim of always fit within the card networks' dispute resolution rules. The only time I can think of this being necessary is airlines that go bust (where a card network dispute would technically succeed but fails because there's literally no money to claim back anymore).

> where I am the payment is automatically done every month from your bank account. There is 0 chance of missing a payment, as long as you have a sufficiently positive floating balance in your account. If someone do not, then I would question their suitability for a credit card in the first place.

See my other comment here: https://news.ycombinator.com/item?id=31504046

[jsmith45]

> In practice, all the fraud I've been victim of always fit within the card networks' dispute resolution rules. The only time I can think of this being necessary is airlines that go bust (where a card network dispute would technically succeed but fails because there's literally no money to claim back anymore).

Does the dispute process have all disputed money be instantly returned to the account? With a credit card, you can simply turn off the auto payment system, and simply not pay the fraudulent part, and you still have your money in the bank account. With a debit card, in the US the banks typically have 10 business days to determine if there was fraud and give your money back. (If the investigation takes longer they return the money on the tenth business day pending the results of the investigation, and if they determine it was not fraud they will take the money back again.)

And in the US many people life paycheck to paycheck with effectively zero savings. If their account is zeroed out due to fraud, Things can get expensive quick.

For example, your rent payment is probably too large to be covered by banks overdraft protection, so you will likely get hit with three bounced check fees. of at least $25. One from you bank from the first attempt. Then a later re-presentment attempt will also fail, and you will get a second fee from your bank. Finally, you will get a bounced check fee from your landlord. Of course since your payment did not go through, you will likely end up with a late fee. etc.

For other bills they could be small enough that you only get hit with overdraft fees, and not the rest. But if not, then things can snowball VERY quickly. And There could be other consequential damages like losses from being unable to get certain items while they are on sale, or even things like the stress of all of this preventing you from closing a sales deal, meaning you lose out on a substantial commission, etc.

And while you can typically get the bank imposed fees waived due to the fraud, as long as they can determine that you would not have suffered those fees if the money had been there, the bank won't always cover all the the incidental and consequential damages. (The terms of service always exclude those).

[gruez]

>> but you have added fraud protection also.

>In practice, all the fraud I've been victim of always fit within the card networks' dispute resolution rules

I think there's an element of "fraud protection" that you're missing. If your debit card gets breached and someone racks up $2000 worth of charges on it, the $2000 is immediately gone from your bank account. If rent/bills are due soon, that might be bad. On the other hand if you have a credit card, you have at least 3-4 weeks since the bill is issued before you have to pay, which means 3-4 extra weeks to get it resolved/refunded without having it affect your finances.

[sgjohnson]

> Maybe in the US - in Europe where interchange is capped, credit card rewards aren't worth it. Not to mention, I like my privacy and don't want to deal with any rewards or offers programs anyway.

Not if you have an American Express card. Interchange is capped only if there's more than 3 parties to the transaction, which is not the case on AmEx.

[bee_rider]

These companies are making money somehow. If they are exploiting people more clever than me, then I'll probably fall for it too. If they are exploiting people less clever than me, seems pretty evil, I don't want anything to do with that.

[CPLX]

How they are making money isn't a secret. They take a percentage of the transaction from the merchant you pay every time you make a charge. It's effectively free from your perspective, the merchant is willing to share some of your money to allow you the convenience of paying by card.

[steelframe]

> you have added fraud protection also

My bank provides fraud protection for my debit card. A card for my account got skimmed and was used to withdraw cash from an ATM. Got my money back with a single phone call to report the fraudulent activity.