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Comment by TylerE | Hacker News Reader

I don't carry (or have) a debit card, and recommend that others do not as well. You have _much_ less fraud protection with a debit card.

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> You have _much_ less fraud protection with a debit card.

Having had ~US$20K sucked out of my debit card (which was ~$10K more than I had), I can verify that you have essentially no recourse. Why the stupid bank authorized someone to go over by such a yuuge amount still baffles me...

Any idea how that happened? I have a combined credit/debit card, but debit is chip only so it can't be copied. I can't see how it could be misused except at gunpoint.

Sure ... it was a chip-less Visa debit card. My point is simply because it was routed to a DDA, not a credit line, the typical protections for a credit card don't apply. (This was the US). They are pretty clear about this in the contract. We even found footage of the malefactor checking out of a department store. Live and learn, I guess... This was some years ago. Now, I almost never leave the house with a debit card, and I have all my cards make my phone go bing! when they are used.

https://www.nolo.com/legal-encyclopedia/unauthorized-credit-...

Assuming you can stomach $50 in the case that you do drop the ball notifying the issuer upon realizing your physical card was physically lost, how do the rules differ appreciably?

Also, how does not having a debit card significantly alter the exposure of a given deposit account (eg through the ACH network), besides just having one fewer network address? It seems like the better option is to get a feed of transactions in a convenient manner, whether tablet notifications or an ofx feed.

(Not that I don't want to stick it to the banks as hard as possible for perpetuating this negligent payment network and tricking customers with terms like "identity theft", but just pragmatically speaking)

Each location you use a card increases the risk of the number getting copied. So using a debit card exposes tons of possible people with entry points into your account.

So once you assume whatever you use will get stolen, you determine what dealing with a stolen card number will be like. With debit cards it's your own cash locked up in a transaction dispute. With credit cards its the credit card companies credit balance and you have no money locked up.

Debit card fraud drains your checking account, creating a short-term emergency: legitimate transactions are then returned for insufficient funds or create overdrafts. Both carry punitive fees. The bank has to restore your funds eventually, but in the meantime, there could be an eviction notice on the door.

You generally share your bank account number with a small number of trusted parties: employer, landlord, creditors, utilities, tax man, etc. Exposure is low. When you start swiping a debit card around town, you hand out the same level of access to every merchant you buy anything from, and whomever might be skimming their terminals or stealing their databases.

Credit card fraud adds to your balance, but you don't have to pay it while the investigation is ongoing. Typically they revoke your card number and mail you a new one. During that time, you live off of a different credit card your debit card. Critical payments go straight to your bank account and are unaffected. When the investigation is over, the charges disappear. At no point are you deprived of actual money, you merely have an inflated short-term debt.

I agree, but these seem like operational concerns that you'd anticipate for each individual account in today's world of broken payment networks. It might even be nicer to have bank account disabled with a few hundred in it, than temporarily lose a credit card with a high limit that you funnel larger payments through for the rewards. You can't prevent this, so my comment was focused on how much you could actually lose after the dust settled.

Good point about a check bouncing though. I would think your bank should waive any charges (after all, you weren't defrauded nor did you write a bad check), but the recipient might complain about their bank's fee (for essentially a rejected ACH transaction, but I digress). Although speaking of checks, readily handing out a printed withdrawal key seems like a poor idea if your goal is avoiding surprises!

> You generally share your bank account number with a small number of trusted parties

Every second website I buy stuff at has my IBAN.

Looks like it's a vety different situation here in Europe.

Sadly, too many US websites don't allow this, I ended up having to get a CC (and pay for it!) just to deal with US bullshit websites demanding a CC. That CC cost me more in fees than I've ever kost in debit transactions.

Credit card is the same old debit card with additional "automatic loan issuance on insufficient funds" service. With debit, your risk is limited to whatever is in the account associated with the card. With credit it is the same risk plus your credit.

Your funds are not really at risk of permanent loss in either case. The difference is what happens in the short term. Also it’s not true at all that debit card losses are limited to your balance. Banks will approve transactions that put you well into negative balance and charge overdraft fees.

In the US, your ATM card is (at least) often a debit card. Perhaps there's some way to flag them so they can be used only as an ATM card up to the usual daily limits. I agree with your basic point though. I have the card but essentially never use it except for withdrawing cash.

That's what I mean, I don't have any sort of ATM card. If I'm really stuck for cash I can do a cash advance on a CC or walk into a branch.

My standard Chase ATM card can be used at stores as either credit or debit. Some payment terminals say "enter PIN for debit, or press continue for credit". Some don't, but at at least one store, despite the prompt just saying "Enter PIN", I was able to pay by pressing continue without entering a PIN, so I think the terminal has the same functionality, just not advertised.

Do you mean (a) you convinced your bank to not issue you one, (b) you shredded the card, or (c) you don't have a savings / checking account?

(B), with (unsuccessful attempts at (A))

In the UK, doing a cash advance on a credit card will hose your credit rating. Is that not true in the US?

It does not hose your credit rating in the US (assuming you pay your CC bill on time). It doesn't even show up as an event on your credit rating, as the decision to extend credit up to your limit has already been approved.

It can actually, although perhaps a little indirectly. Off the top of my head, the credit card balance is a direct I put to both the Debt to Income Ratio (small affect), and Percentage of Revolving Credit Available (much larger affect). These are not deal breakers, but did lower the score at both places I worked where this mattered.

Well, certainly if your carried balance goes up as a percentage of revolving credit, that will affect the score. But this would hold true whether you did a cash-advance or bought a TV, no?

EDIT: IIRC, the Debt-to-Income ratio calculation (if you were to apply for a mortgage, for example), is based on your aggregate credit-card limits (used or not), on the assumption that you could be that exposed. I remember when I were a young lad, I had to kill a card (or two?) that I wasn't even using in order to get the mortgage rate I was looking for because of this effect.

Okay, so just to explain the way this works in the UK - a cash advance shows up directly against the card and month it was taken. Credit scorers typically treat it as a sign that you're living outside your means, and so it has a very serious effect on your ability to get credit.

There are certain types of payment which are also classed as a cash advance and sometimes catch people out, such as to gambling sites.

I have no reason to think it hoses your credit rating in the US if you pay your bill (or at least the minimum) on time. What it does do though AFAIK--it's been a long time since I've done it--is to start the clock on paying whatever extremely high interest rate your card has on the total balance on the card. Including your regular charges that would otherwise be carried interest-free until the payment due date.

So it's generally a very bad idea to get a cash advance on your credit card, especially a credit card that you also use to charge other purchases.

I had a debit card from Citibank but I had to call and specifically request only an ATM card as debit cards are absolutely horrendous. They were able to issue an ATM only card.

I simply solved this by using a prepaid credit card. Sadly they are less accepted but there is a significant amount of fraud protection and I can manually control how much damage can even exist in case the fraud protection somehow fails.

I only need it for american services though, all EU services I use accept SEPA pull or push, Sofort, giropay or Paypal with a bank account (strangely enough, some american services in the past declines to accept a paypal account without credit card, weird stuff)

My personal recommendation to US people is avoid connecting PayPal to your bank account. I don't know what protections they have in the EU but I doubt we have them so better safe than sorry. Use your credit card.

Paypal provides fraud protection against my bank account. And I can always revoke their SEPA Mandate and demand my money back as long as 6 weeks have not passed since the direct debit. (German law atleast) My bank ensures this by notifying me when I receive a bank statement on the online interface and mailing it me on my own cost via postal service if I don't mark it read (about 5€ IIRC) within a week.

Same goes for any SEPA DD based transactions. Everything else is secured via TAN, which depending on what generator method you choose (SMS, Optical, HBCI or Smartphone App) has varying levels of security (Optical and HBCI are highest atm, then App and SMS last, atleast according to my knowledge and understanding of the implementations).

The only bad part is when paypal fucks you over but that's a given risk when interacting with paypal anyway.

This works only in the states. In other countries, the fraud protection is reduced (ICBC AmEx in China) or there are fees involved (Europe).

Not true in Europe.

Also my bank issues me temporary debit cards for online purchases.

I can chose if the card is for one purchase or for multiple purchases with the same entity, over a period up to 12 months.

I can set a monthly or a total limit.

I can request as many cards as I wish and they are free. I use a new card for every online purchase.

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