[etfb]

America is a funny place. You can get 127 varieties of salad dressing at your local supermarket, but you can't pay for it except with cash, unless you want to be hit with credit charges, and when you do the prices are not as marked. Australia, in sharp contrast, has laws requiring that the price on the shelf matches the price at the register -- some of them even allow you to get incorrectly-priced items for free, although technically this is a voluntary agreement among shops, not a law. Also, Australia has EFTPOS nearly everywhere; in fact, people are justly suspicious of retail businesses that don't provide EFTPOS, because that's one of the first signs that the business is probably going to go under. And if you want to transfer money, the same system that makes EFTPOS ubiquitous makes direct deposit from one bank account to another a very simple thing. The result is that cheques ("checks" in US English) are very rare indeed, and people really only use credit cards for online purchases or when they're already living beyond their means. (Which means the use of a credit card in day-to-day spending is another warning sign!)

Granted, it's hard to get all 127 varieties of salad dressing here, so there is that.

[timv]

people really only use credit cards for online purchases or when they're already living beyond their means

If I'm parsing what you're saying correctly, then that doesn't match my experience.

Most people I know will use a credit card at an EFTPOS machine in preference to using their ATM card, and lots of people use the credit card regular because it's simpler than regularly getting cash from the ATM.

My current trip from Home -> Work does not go directly past any ATMs that are free for me (I pass a couple, but the ATM operator will charge me to use them), so I regularly buy everyday items on my credit card.

Heck, I buy my train ticket (a whole $6.60) on my credit card each morning because

1. it doesn't cost me any more than paying with cash

2. it saves me from having to worry about whether my wallet is empty, when my focus is on getting in to the office

Now, I also have a cheque book in a drawer somewhere, but I think the last time I used it would have been when about 3 years ago when I needed to give my parents some money and my Mum didn't have her bank account details with her (which would have allowed me to transfer it electronically)

[etfb]

Credit cards are still more expensive than debit cards, and in Australia any machine that can take the former will take the latter as well. Credit cards allow you to spend money you don't have, whereas debit cards don't.

[timv]

Sure, credit cards aren't a good product for every person, but your dismissal of them is fairly shallow.

Not all credit cards have annual fees, and those that do usually offer benefits to the card holder that the card holder has determined are worth the cost of the fee.

Interest is only charged if you don't pay your card off each month, and I have mine set up to pay automatically.

They do allow you to spend money you don't have, but they are also isolated from your savings account. My credit card limit is substantially lower than the amount of money in my bank account. A debit card on that account would mean that card fraud actually has an impact on my savings.

In addition in most cases, using a debit card over a credit card network (as opposed to EPTPOS) subjects you to the same rules as using a credit card - you can still end up spending money you don't have, and be liable for it. So your distinction between Credit and Debit cards is actually between credit card networks and the EFTPOS network.

All of which is unrelated to your original point that I was offering a counter-opinion to. Regardless of you personal views on the merits of credit cards, my experience is that Australians use credit cards for in store purchases more often than EFTPOS, and much more frequently than your suggestion of "when they're already living beyond their means".

[etfb]

One way to reconcile our views on this is the hypothesis that most Australians are living beyond their means...

[stinky613]

I don't think your impression of American shopping is accurate.

Many people pay with credit cards because they don't want to deal with loose coins and because credit card transactions can be viewed online. Anything I put on my Visa card I pay off in full at the end of the billing period; there are no fees, charges, or changes in prices that hit you when you use a credit card.

[joe_fishfish]

In the UK we can do all that with debit cards, only there's no monthly bill to occasionally forget to pay.

[stinky613]

We too can use debit cards that way. The laws regarding fraud liability differ between debit and credit. As such, credit card providers generally have fraud detection departments working around the clock, whereas the onus is entirely on you to report fraudulent charges on a debit card within so many days of the charges appearing on your monthly statement.

[eli]

I get refunds (i.e. negative fees) when I buy something on my credit card. I'm not aware of any debit card that offers that.

[GFischer]

OTOH there's the hidden cost of transactions, which the seller pays (and that's where the refunds come from), which admittedly won't go away if it's just you who stops using credit cards.

[jacques_chester]

One key difference: banks in Australia have high assurance of identity because of the 100-point check, which non-Australians may find sounds a bit like what Dwolla were asking for.

http://en.wikipedia.org/wiki/100_point_check

[timdorr]

I haven't ever been subject to differing costs between credit/debit card and cash prices, with the sole exception of the liquor store. Are there specific stores in the US that do this?

[etfb]

Credit cards have fees -- interest, account-keeping fees, and so on. It's why banks like them.

[pfisch]

Only if you don't pay them off immediately, or you agree to an annual fee for specific benefits.

[lmm]

Depends on the card. I've got one that charges interest on purchases even if they were made in that same month. (In general you're right though)

[alimoeeny]

have you ever used your credit card at gas station?

[timdorr]

I own a Model S :P

But yes, and most gas stations I've ever used don't have a cash and credit price.

[obviouslygreen]

...people really only use credit cards for online purchases or when they're already living beyond their means. (Which means the use of a credit card in day-to-day spending is another warning sign!)

Ridiculous, unsubstantiated, and false. The US is not perfect, but neither are your ideas about credit cards and the people who use them. I, much of my family, and many of my friends use credit cards for all of our daily expenses and pay them off immediately, or at least before the bills are due. It's convenient and lets you keep a small cash stash on you that rarely gets used just in case you need it.

[Anderkent]

Then why not just use a debit card, and if you turn out to need that cash stash, use your credit card then? Or take any kind of loan, most of which will have better terms than your credit card anyway...

[aianus]

Please point me to "any kind of loan" that has better terms than my credit card. My credit card company literally pays me money to lend me money for a month at a time. I'd have to be an idiot not to take them up on that offer.

[obviouslygreen]

That's a choice you can make, but it's not relevant to the point I'm refuting. :)

[jusben1369]

Hah. Australia's population is half of California's so having "singular" experiences is just a wee bit easier. I'm not sure what you're referencing with prices being different between cash and credit. It sounds like you might have been struggling with county taxes that vary significantly and thus mean you don't see the final price till you pay.

[abbasaamer]

If you think pricing is confusing at an American store, you should try figuring out how much anything in the American healthcare system is going to cost you. I've honestly gotten answers from doctors and staff that turned out to be off by an order of magnitude.