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Comment by egeozcan | Hacker News Reader

Debit card is pretty equivalent to cash, though. When my friends and family from my hometown (Istanbul) visit me the first time, they are usually quite shocked that most shops here do not accept credit cards at all. In Turkey (a place I call micro-USA), many credit cards automatically divide the payments for some transactions to 3+ months, whereas here in Germany, there's always some bureaucracy involved, even if you explicitly ask for it.

11 years ago, when I was living in Istanbul, I had bought bread from a supermarket and I paid with my credit-card, vendor of which had a deal with that supermarket-chain and automatically divided the payment of the bread to 10 months. If I remember correctly, they later banned the postponing of the payment of basic goods because it was getting ridiculous.

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The Turkish payment system really is an eye-opener for its sophistication. I used to work in credit cards and did a study tour to Istanbul in 2004 to see it first hand and talk to both merchants and the issuing banks.

One big difference in Turkey is many shops had 5 or more card terminals, each in the colour of the issuing bank. Banks competed for both merchants and consumers by offering value-added features unique to their terminal, such as instalment credit instantly accessible to only their customers.

Instalment credit was popular in Turkey following the economic crisis in 2001 (3000% interest rates) because many people simply didn't have the cash to pay up front for major purchases such as whitegoods or even shoes.

In most other countries, shops have only one payment terminal, supplied by the acquiring bank (acquiring = acquires payment transactions, as distinct from issuing = issuing payment cards to consumers). That terminal has to support all cards equally, using the base Visa/MasterCard standards. Hence there are no value-added payment options.

They are still popular, and they are doing everything they can to reduce your ability to compare their offerings: https://translate.google.com/translate?sl=tr&tl=en&js=y&prev...

I've never heard of anything like the dividing of payments you're describing. Are you saying that the CC company doesn't pay the merchant all at once, by default? That seems really shady. They should either have enough capital to pay the merchant in-full right away, or they should pay the merchant the interest they're collecting from the buyer if they buyer isn't paying the CC bill in full each month.

The bank pays the full amount immediately, unless they have a special agreement with the seller. You get different treatment according to your CC provider. Here is an example: http://www.gold.com.tr/BankaKampanya.aspx (Turkish). "Peşin fiyatına 3 Ay taksit" means "3 months payments without interest". They usually inflate the price beforehand to account for such payments, so you are disincentivized to use a debit card or to pay in cash. Such tactics are fought against by the national banking organization but they always find another way (like having ridiculously low, "symbolic" interests for specific sellers/goods). The whole situation used to be grim when I left Turkey many years ago, but I don't imagine it being better now.

Ah, I see. In the US a common marketing offer for credit cards is that they let you make one charge that will be interest-free for 6 or 12 months. You can pay it off whenever and however you like, but if you don't pay the whole thing before the deadline you'll owe all of the interest for the whole period. They make money off of this two ways:

1) People forget to pay it off before the final date. They're not always clear about when that date is; you know exactly how long it's been since the charge, but you don't know for sure when your payment will be applied. It's best to pay the total off at least a month before the final date, to be sure it's paid during the billing cycle before it is due.

2) If you use the card for anything else, there's fine-print that says that any payments will go towards non-promotional charges first. It can get very difficult to determine if you've paid the promotional charge off or not, and they typically do not assist you in figuring that out.

They also benefit from extending you more credit than you need for the one charge you want to make, especially since you're unlikely to use it in order to avoid trap #2. And they benefit from having an additional customer on the books. I'm sure these benefits make them money somehow too.

Not really. Debit cards are debit cards, not cash. You are comparing CC to DC as far as I can tell, but they are completely different products. There is a huge difference between having currency in your hand or use a medium to access money held by the private organization that can go bankrupt (and this happens much more often than, for example, governments with their currencies).

>There is a huge difference between having currency in your hand or use a medium to access money held by the private organization that can go bankrupt (and this happens much more often than, for example, governments with their currencies)

From some aspects, yes. From others (no interest in purchases, directly reducing one's account balance, etc) they are the same.

Still not often enough to matter, especially since the cash one has at hand will be a limited amount anyway.

It's not like having $100 or $300 in your pocket to buy things (as opposed to using a debit card) really protects you from the "private organization that can go bankrupt", when the large majority of your money will be in some bank anyway.

Except if you propose we keep all our money in cash at all times. This has other issues, not just a government going bankrupt, but inflation, theft -- and those things are much more common than a bank going bankrupt.

Both Germany and the US insure savings accounts for 6 figure amounts, meaning bankruptcy is not a major concern for most people.

This may be so. I often wonder though if this "disaster recovery plan" has been tested with any bank of significant size. Maybe that's where the whole too-big-to-fail thing comes in.

Depends what you consider significant. The UK's Financial Services Compensation Scheme, which handles depositor protection, paid out over 26 billion pounds in the 2006-2011 period.

At the same time, though, the govt did push Lloyds TSB to take over HBOS in 2008 rather than let the latter fail.

Some relevant info: In the USA average consumers are protected by the FDIC for the balances of their deposits up to $250,000. A large number of banks have consumer liability limits in place for protection from fraudulent charges on their credit cards.

https://www.fdic.gov/consumers/banking/facts/

In case of large defaulting companies history has shown that there are no 100% safety nets despite all claims.

Those claims are made to increase trust and lower market interest rates for companies to borrow money but regularly failed once really needed.

There is a distinction only if you mean holding all your cash in your own safe, when you say "cash". You will need to get a bank account anyway as transactions of a certain kind and size (like getting your monthly wage and buying a car) need to go through a bank.

There is zero practical difference if you withdraw from an ATM every other day or more often, so you can pay cash.

When paying with cash you are also only exposed to the risk of loosing what you have on hand. A debit card is a bit more akin to handing over the key to the vault with a contractual agreement as to how much can be taken.

If you think that is a problem with debit cards you should go get a better bank.

I haven't had this problem with my bank just pointing out the inherent differences. With a debit card you are relying on the cyber security and data retention policy of the store, the bank, and the electronic network provider.

Now I realize that if your account is used without authorization most banks refund the money. This can take a certain amount of time and could lock up your remaining funds in the meantime.

Less than a month ago my card details (the magnetic stripe) got swiped. However my bank noticed the funky payments, automatically detected the issues, temporarily froze the card. Then when I noticed it didn't work and called them they temporarily locked up the card for a single use, and then blocked it permanently and sent out a new card.

I noticed it on Thursday, I had the new card and all unwanted transactions rolled back on Monday.

This for a debit/Visa hybrid card, which acts as Visa out of country and on the Internet.

Also, the bank requires me to temporarily unlock the card for 'unsafe' Internet purchases before usage, which basically is all purchases that don't involve 2FA.

If you think this. Or the dozen times credit card data have been stolen in mass from websites aren't a serious issue you should read more news.

I know I can charge back. But then I need to waste time to check all the charges and go through the charge back process.

Also depit cards. At least in Europe. AFAIK don't offer a easy charge back at all

The laws on liability are very different in Europe and the US. In the US a stolen card is the bank's problem. In Europe it is the consumer's problem. This difference in laws is critical to this discussion, both sides are saying "you are wrong" when in fact both sides are right in their respective country and wrong in the other.

It's not in Europe. It's just a hustle when it happens

Are there banks that provide credit card-like protections for debit cards? I thought you couldn't reverse debit card transactions. There are usually daily limits, though, which would limit how much you could lose.

This sounds like the most fantastic way to get a literal wage slave.

Exactly, I mean, maybe it's not clear from my comment but it was very hard to calculate how much disposable income I'd be left with after the monthly payments. In the statement, you see how many payments left for each transaction but when you buy practically everything like that, one would need dedicated software to figure out his/her financial situation.

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