[wbc]

This whole thing is just so regressive. Every time I use my 2% back card, I know some less privileged folks paying cash gets shafted.

I wish everyone would use just debit cards over ccs, faster than trying to count out coins, less fees.

[Loughla]

I agree with the less privileged folks getting shafted statement, but for the rest:

I am 100% unwilling to use my debit card for any purchases.

Why?

Fraud. If I pay with cash, then fraud amounts to getting actually robbed. Identity theft and account compromising is literally impossible. If I pay with credit, it is MASSIVELY simple to get that fixed, and it becomes the cc company's problem.

With a debit card, any issues immediately become my issue, because the money is out of my account in that moment. Not good.

[runnerup]

> If I pay with cash, then fraud amounts to getting actually robbed.

Getting robbed cash in your wallet you are 100% out of the money. But fraud on a debit card must be made whole by the bank within 30-60 days per “Regulation E”, which offers similar protections to debit cards that credit cards receive under “Regulation Z”

[scarface74]

And using a credit card the money never comes out of my account.

[wombat_trouble]

This is a popular take, but I found relatively little difference in how my bank handles CC and debit card fraud. In both cases, they credited the disputed amount to me right away.

Not that it buys you much; there's plenty of small / specialty merchants who might offer you a discount for paying with cash or check, but they treat credit and debit the same.

[jjav]

> This is a popular take, but I found relatively little difference in how my bank handles CC and debit card fraud. In both cases, they credited the disputed amount to me right away.

There is indeed usually not much difference in how banks handle the fraud on credit cards and debit cards.

But it is vital to understand that with credit cards, you are off the hook on fraud due to regulations (in the USA, don't know other countries laws). With debit cards, you're probably off the hook on fraud only because the bank wants to be nice in the name of customer service (usually and only up to a point).

So with debit card fraud the bank might decide they don't really want to keep you as a customer and things become your problem. With a credit card it'll never be your problem because the regulations make it so.

[lxgr]

> with credit cards, you are off the hook on fraud due to regulations

If your issuer contractually offers zero liability for debit fraud, that is just as binding as regulations – and most do.

And if they don't, from a regulatory point of view, the liability for debit cards is limited to $500 when reported within 60 days of receiving your statement, compared to $50 for credit cards: Certainly a difference, but definitely not as drastic as "you're always on the hook" vs. "never your problem" as it is often characterized.

> So with debit card fraud the bank might decide they don't really want to keep you as a customer and things become your problem. With a credit card it'll never be your problem because the regulations make it so.

The regulations say nothing about the issuer having to keep you as a customer going forward. I highly doubt that, given reoccurring fraud cases even after a couple of card/number replacements, credit card issuers would be keeping you as a customer any more than debit issuers.

[jjav]

> If your issuer contractually offers zero liability for debit fraud, that is just as binding as regulations – and most do.

Every bank card or account I've ever had regularly send out notices saying they have changed their terms of service and your continued use of the account indicates your agreement to the new terms.

In other words they can change those any time they want unilaterally and you probably won't even notice (because who reads those terms of service?)

You may also want to read all the fine print to see if they carve themselves any exceptions.

The great benefit of the protections under credit card regulations is not having to worry about any such shenanigans. The bank can't change the regulation so you know you're always protected, full stop.

Also remember that fraud on a debit card hits your account balance immediately, even if you can later argue to have it credited. Fraud on a credit card simply hits the credit card and can't touch your real money. Think of a credit card as cloudflare layer for your bank account agains fraud DoS.

I'm always very puzzled as why in the US one would ever use a debit card (I say US because I'm not familiar with regulations in other countries). A credit card offers stronger protections, stronger account isolation and cash back rewards.

[lxgr]

> [...] fraud on a debit card hits your account balance immediately, even if you can later argue to have it credited. Fraud on a credit card simply hits the credit card and can't touch your real money.

It can touch your real credit score (if not resolved in your favor), which directly correlates with your ability to continue using credit cards.

And either way, you lose liquidity until the provisional credit (which is very soon in both scenarios, also required by law!), although admittedly money in a checking account is slightly more liquid since you can pay rent and cash-only expenses with it without incurring interest changes.

> I'm always very puzzled as why in the US one would ever use a debit card

Many people don't have credit, don't feel comfortable with the possibility of having to pay absurd interest rates in case they can't make a payment, or a combination thereof.

[_ktx2]

On my credit card I've reported fraud and been reimbursed immediately. On my debit card there's a lot more hassle. I can stop a transaction and I can report the fraud, but it takes a long time to resolve (usually weeks). They're two different systems entirely. For instance, I signed up for a single month of the LA Times as part of a charity drive. They continued billing me for over a year which is clearly fraud. The best I could do was stop the transaction that month and I'd have to contact them for reimbursement before my bank would step in. Basically, "try to do business with the fraudsters first, if they refuse we might help."

[hateful]

For me it's this, plus it's not ADHD friendly.

It acts as a capacitor/battery for my money. My spending fluctuates, but my income is steady.

[kondbg]

Using debit cards means that you need to keep a sufficient balance on a zero interest checking account in order to make transactions.

Using credit cards allows you to keep close to a zero checking account balance and manage your own cash flow, since credit card bill dates are deterministic.

Why would anybody want to keep _any_ amount of money in a non-interest bearing checking account right now especially when the risk free rate of interest (US treasury bills / equivalent money market funds invested in US treasuries) yields 4.00%+ APY now?

[lxgr]

> Using debit cards means that you need to keep a sufficient balance on a zero interest checking account in order to make transactions.

Many banks allow linking a savings account to a checking account as a backup funding source.

> Why would anybody want to keep _any_ amount of money in a non-interest bearing checking account right now

Conversely, why would any credit card issuer give you an interest-free loan for a month in a world of 4.00%+ risk-free APYs?

Leaving aside all concerns of repayment risk, somebody is paying for your interest-free loan already.

Depending on how you view it, that's either yourself (via 2-3% of credit card fees baked into all retail prices) or other credit card users that don't pay their credit card bills in full every month, or a combination of both.

[scarface74]

> Many banks allow linking a savings account to a checking account as a backup funding source.

And the average American can’t handle a $400 emergency. They don’t have a savings account with thousands of dollars

[lxgr]

True, but how high is the chance that somebody that can't handle a $400 emergency today will be able to pay back $400 of credit card debt next month? And if they don't, they usually end up in more problems down the road.

Also, there is nothing that says you couldn't use a debit card for normal spending and resort to using a credit card only for when you actually need credit (assuming that the rewards inefficiency gets fixed).

[scarface74]

I was answering in the context of the difference between chargebacks on credit cards vs debit cards. You aren’t out of your money while waiting on a chargeback to be processed when using a credit cards.

[lxgr]

You're out of $400 of liquidity (until the issuer provisionally credits your account, which they are required for credit and debit alike) either way.

The only difference is lost interest payments for these ~5 business days (which the issuer might even have to reimburse as well; I'm not too sure about that though), as well as not being able to pay for cash-only expenses using the money in your bank account.

Also, nobody is saying that people can only have one single bank account, and a debit card linked to it with no spending limit attached to it.

[ramraj07]

Or you know, completely disconnect the need for cards. My time in india is so much fun since I can walk out of my house with just my phone in hand knowing I can pay using QR codes directly and not worry about accounts or charges.

[MajimasEyepatch]

You can do the same thing in the US with Apple Pay and the like. They're pretty widely accepted nowadays.

I don't really see how Apple Pay backed by a credit card or debit card is any different from how a QR code system would work in practice.

[ramraj07]

Big difference is QR code based payments in india are absolutely free, no processor is allowed to charge a fee for such payments. In fact that’s the fundamental crux of what we are talking about here so I’m not sure why Apple Pay working is relevant unless it has no hidden fees to the merchant.

[scarface74]

And how is that any different? Money is still coming out of your account electronically. In the US, I can walk around with just my Watch to pay.

[ramraj07]

No hidden fees to anyone.

[scarface74]

Of course the payment processor always takes a cut.

[ramraj07]

Please look up how the UPI system works in india. The processor is the government and they don’t take a cut.

[HaloZero]

How does that work with fraud? I noticed that everyone accepts those QR codes.

I will say though as a tourist who was visiting my family but doesn't have a bank account, those QR codes are pretty nice but completely inaccessible to everyone outside of India :/

[shortcake27]

Same issue in Thailand. QR accepted absolutely everywhere, _but_ tourists can’t really use it (TrueMoney is supposedly a solution but it didn’t end up working, can’t remember why). Cash is so painful as many vendors flat out refuse large notes. I wish someone would just set up a service where I can link my CC to pay via QRs. I’d pay a 3% fee to avoid the inconvenience of cash.

[forgotmypw17]

I think you may be forgetting about people who do not have a bank account.

[scarface74]

Most of my points come from spending on airlines and hotels.