Hacker News Reader

Comment by kayoone | Hacker News Reader

Especially in some european countries like Germany, where CCs are not very popular and can't be used in a lot of places, it's easy to think that they are ultimately bad because people get this false feeling of thinking they can afford things they actually can't or shouldn't. And for the individual that is probably true.

On the other hand, the economics effects of credit cards, or credit/loans in general can't be understated. Some industries and therefor technological advances like cars or housing for example, would never be where they are without credits/loans.

In the same way i think that a lof of things like computers, tvs, holidays would never get bought without the existence of credit cards. And in the end all of that feeds the gigantic banking industry and can also be seen as the base of everything thats wrong with our financial system, as shown in the 2009 crash.

View on HN

Does someone have a list of countries where credit cards (as opposed to debit cards) are actually popular (apart from the US?) I'm in the Netherlands, and I only use mine for international online payments, and I have it with me as a backup (but seldom use it) while travelling abroad. And even then, it's automatically paid off in full every month, so the credit function isn't really doing much. For the rest I use cash, or have a debit card from my bank, which is accepted in most European countries. As for acceptance, hotels and restaurants, and tourist-oriented shops generally accept it, but otherwise almost no-one. (Edit: added emphasis on credit cards as opposed to debit cards.)

Norway here, it's super popular. The only place in my entire life that I was not using a credit card regularly at was the local flea market, but last time I went there they even had one of those portable credit card things. Otherwise, I use it to pay for food, taxi, bars, just everything.

Even if I need to send some money to a friend to pay for my share of the pizza, we use an app that lets us send money between credit cards.

I haven't carried coins on me for more than a year. I do have one backup bill hidden away in my wallet just in case things go sour.

Are those actual credit cards or are they debit cards? If you pay for something, when does it bill your actual account?

They are debit cards.

Most bank cards issued in Norway that i have seen are debit first via the national system, with the option of using either a VISA or Mastercard as a second option.

And while i have only had to deal with VISA, those billed directly to the account (and seems to be a popular way for paying online).

Unless Norway is wildly different from Sweden then most use a debit card.

Many people carry a credit card too, perhaps as a free service from their bank, or a company card - but so long as one has both it's normally best to use the debit one. If you always pay the bill in time there's very little difference, but I feel a big mental threshold to "buy now pay later".

Aren't you using a debit card, not a credit card? Those are very popular in NL too. There are even some shops that don't accept cash anymore (something I think that should be made illegal, but that's a different story), although on the other hand there are shops that only accept cash.

>something I think that should be made illegal, but that's a different story

Why does everything need to be made illegal? If you aren't satisfied with the service a shop provides, don't shop there.

Legal tender should always be accepted. Imagine if you were unable to buy food because you were denied credit.

This is why in the US we have debit cards that behave like credit cards in every way except the credit line (and don't cut you in on the transaction fee). Very popular with teenagers and people who are afraid of credit (possibly for good reason).

Cash is legal tender for all debts. If you owe someone money without a prior agreement on form of payment, they must accept cash payments. They're under no obligation to make a transaction in the first place if you don't agree on payment method.

It's a form of arrested development I think - wanting the state to take care of their every trivial complaint.

Just because they have the VISA or Mastercard logo on them do not mean they are credit cards.

That's the thing, debit cards are so common in Scandinavia so many people call them "credit cards" ("kreditkort") even though they're really not.

Likely because most of them come with the option of making payments via either the VISA or Mastercard network if the national system is not an option (traveling, some bars and restaurants, online purchases).

In Fiji the govt charges a levy of 2.5% on every credit card transaction, so they are rarely used day-to-day. Debit cards are the norm.

Actually I'm pretty sure my only card (here in France) is a credit card. It's written "credit" on it, after all (it used not to say it, but I was issued a new one recently precisely because regulations now say it has to be written on the card, apparently).

But until I lived in Canada, I had never really understood the difference between debit and credit cards, I didn't know you had to manually pay your credit card's balance from your bank account once a month or so.

My "credit" card just pulls money from my account at each purchase (well, a few days later). When I was in Germany and the Netherlands last year, every shop was asking whether my card was credit or debit, and I wasn't even sure what to say.

that sounds like a debit card to me.

To me too. It certainly is written CREDIT on it though.

https://en.wikipedia.org/wiki/Debit_card#France

Dunno how accurate it is, but i suspect your card has either a VISA or Mastercard logo on it. That means that when you are abroad the payment is done via either of those, but while in France it is handled via the national system.

It pretty much is, in the sense that there's no revolving credit associated with the card, merely a monthly limit (typically 2 or 3 thousands euro) and your account will be overdrawn if there isn't enough money when the bill is charged.

The thing is, both Visa and MasterCard have credit and debit versions of their cards. And thanks to recent European laws, the card has to explicitly state which kind it is, since the transaction fees are different for the merchant (and are capped to 0.3 and 0.2% respectively). Now in France, you won't get a Maestro or Vpay card even if you want a true debit card. It'll be a MasterCard or Visa. Payments are either debited right away or at the end of month. And banks have started to emit "debit" cards for the former, and "credit" versions for the latter, but it's completely irrelevant for domestic payments.

Credit cards are popular in the UK, though 2.8x more is spent on debit cards. Total spends on credit and debit cards are £174B and £486B, respectively. For some numbers see pg 9 of the UK Card Payments 2016 report here: http://www.theukcardsassociation.org.uk/downloads/index.asp

South Korea here. Nearly everyone has a credit card, and every legitimate business accepts them. The government has been trying really hard for the last 10 years or so to force everyone to use plastic, primarily as a means to curb tax evasion by small businesses. Consumers can even get a tax credit for the amount they spend with a credit card.

Debit cards (called "check cards" here) are becoming more popular lately. Thanks to the aggressive adoption of credit cards, the infrastructure to handle debit cards was already there by the time the government decided to extend the tax credit to debit cards as well. Nowadays it's a toss-up between credit cards and debit cards.

But what we call credit cards here is a bit different from the American counterparts. Most Korean credit cards require you to pay the whole balance every month, unless you specifically request a different payment plan at the time of purchase. The amount you have to pay for each of the next few months, including interest, is also fixed at the time of purchase. You can't just pay an arbitrary fraction of your balance or transfer your balance to another card. So it's halfway between a traditional charge card and an American-style revolving credit card. Some banks do have revolving credit cards available, but AFAIK they are not very popular.

This situation is identical to the one in Israel.

> This situation is identical to the one in Israel.

Although they are still called credit cards ("kartisei ashrai" == "כרטיסי אשראי") in Israel, and there are some other minor wrinkles, like the way you pay interest rather than penalties when you overdraw your bank account ("overdraft" == "אוברדראפט"), though it is still more expensive than a loan, so something like 3/4 of the population is always overdrawn by some amount.

In Finland everyone I know has a card that is both debit and credit - you choose everytime you make a payment which side to use.

Pure debit cards also exist, but are not that common, at least what I know.

The concept of lines of credit existed for a long time before credit cards, but were largely limited to businesses.

They allow a factory for example to keep buying inputs while their outputs are being shipped to customers etc.

Credit cards, and their effect on the overall economy is a different beast however. Especially as they have to a large extent replaced the push for higher wages.

> they have to a large extent replaced the push for higher wages.

A fascinating claim. I can see how that would work, but haven't heard of it before. Is this commonly accepted knowledge in the US, or do you have a source?

I suspect i picked it up from one of Steve Keen's presentations or articles/blogs, but i can't find a direct reference for you at this moment.

> cars or housing for example, would never be where they are without credits/loans.

If it were impossible to convince people to take out massive loans to buy cars and houses, the automotive and housing industry would probably have taken a different approach in order to sell their goods.

Rentals might have become more popular, curbing the growth of the suburbs, affording workers higher mobility, and resulting in a smaller carbon footprint for the country as a whole.

Ditto for other expensive items such as computers and smartphones. Most of us don't really own our devices anyway; we exercise limited control over the device at the mercy of the manufacturer and/or carrier. It doesn't take much imagination to go one step further and say that you're just renting it for the duration of your contract. I don't really like this scenario, but it's a possibility.

I seem to recall reading that Ford offered his factory employees to take a model T home with them and pay it down via a deduction on their monthly wage.

I think the specificity is misplaced in the context of the article. In the first place, he didn't even create a credit card - it was a charge card, where the whole balance needs to be paid off in a month. Secondarily, without charge and debit cards paving the way, would we even have debit cards today?

>On the other hand, the economics effects of credit cards, or credit/loans in general can't be understated. Some industries and therefor technological advances like... housing

Humans have managed to build and live in accommodation for thousands of years without taking out fixed rate mortgages.

>In the same way i think that a lof of things like computers, tvs, holidays would never get bought without the existence of credit cards.

Consumer goods were purchased without problems before credit cards existed. Habitually buying consumer goods on credit has largely paralleled the great 1970s decoupling from wealth and productivity.

"In the same way i think that a lof of things like computers, tvs, holidays would never get bought without the existence of credit cards."

Would you mind explaining why that would be the case?

Likely seeing that the up front cost would be too high for anyone to save up for them.

Never mind that paying through installments or similar existed long before credit cards came about.

I guess the one thing that credit cards did was that they moved the arrangement from being between seller and buyer to be between buyer and card company. so rather than having to get a installment plan set up for every purchase, one instead get them all bundled onto the card account.

I'd imagined so. I was surprised by that affirmation as it does not seem very obvious to me.

I guess that one thing that might get confused is the cultural shift of enabling debt accumulation without direct relation of shame with the seller to the actual buying possibilites.

> On the other hand, the economics effects of credit cards, or credit/loans in general can't be understated. Some industries and therefor technological advances like cars or housing for example, would never be where they are without credits/loans.

credit card != line of credit

How would a credit card work, without a line of credit to back it up?

Line of credit and the whole economic concept of credit existed long before credit card.

Credit card is just lubricant to the economy (or debt making some might say).

> Line of credit and the whole economic concept of credit existed long before credit card.

I didn't ask how can a line of credit exist without a credit card, I asked how can a credit card exist without a line of credit.

> Credit card is just lubricant to the economy (or debt making some might say).

I still don't think that answers the question.

> I didn't ask how can a line of credit exist without a credit card, I asked how can a credit card exist without a line of credit.

What makes you think it can't ? Of course a credit card relies on the concept of line of credit.

I am stating the obvious that two things (line of credit and credit card) are different and you are the one asking how one (credit card) can exist without the other one (line of credit) like it implied both are the same or mutually dependent. It's not. There are a lot of countries where you can have a line of credit without a credit card. Hence: line of credit != credit card.

> > Credit card is just lubricant to the economy (or debt making some might say).

> I still don't think that answers the question.

That's because you pick the wrong sentence in my reply and make it an answer to your question in order to fit your argument.

Or maybe you really are arguing that a credit card is actually the same thing as a line of credit ?

No I don't think a line of credit is the same thing as a credit card, and I don't think you need a credit card to have a line of credit.

I'm arguing you can't have a credit card without a line of credit.

You're saying that you can have a line of credit without a card. That's the other way around to how I say it, see? I'm not disagreeing with that one.

If you read what the person was originally responding to, it was an assertion that credit cards are the only form of credit.

The text you quoted says or credit/loans in general.

More true in the 90's. Now the biggest debts are student loans (in the US)

Reply on news.ycombinator.com