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Comment by HenryBemis | Hacker News Reader

I use a "7 accounts setup" for my finances. One of my accounts is labelled "Internet" and has no more than £50-£100 at any given moment. It is the card used for Paypal, Amazon, Spotify, etc. If that card gets compromised I won't lose more than that, and my bank will most likely return the funds (yes even if it's just a Debit Card). If the account runs low then Spotify won't get paid in time and I won't cry about it :)

I was inspired by this video: https://m.youtube.com/watch?v=auzLhKvsxnQ

I always had multiple accounts but this vid and a discussion with friends (bankers and accountants) helped us all develop (each his own) 7 (or more) accounts setup. Imagine a "Dave Ramsey envelope system", but online.

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Why would you ever use a debit card over a credit card?

Because the use of credit cards over debit cards is pretty much a uniquely american phenomenon.

Why would you ever use a credit card over a debit card???

With debit you spend the money you own.

With credit you take debt. On every single payment. You are taking debt. Only at the end of the month you pay your debt.

If you spent too much, (by accident) you now have to pay overdraft interest.

With debit you spend the actual money you own.

If a purchase (fraudulent or not) exceeds your current balance, the payment won’t process.

But that is a good thing.

You shouldn’t be buying things you don’t have the money for anyway...

>If a purchase (fraudulent or not) exceeds your current balance, the payment won’t process

>But that is a good thing.

In case of fraud that's a bad thing because your cash flow is now screwed until the dispute's resolved. What do you do if you have $1000 in the bank, you get a fraudulent charge for $600, and this months rent of $800 is coming up?

Here in the Netherlands it is exceptionally hard to kick someone out of "their" home when doing so would leave them homeless. Being 1 month behind on your rent for 1 or 2 months may get you some stern letters, but you won't get kicked out if it happens once.

In the UK the tenant needs to be 2 months behind in rent before the landlord can start the eviction process.

I asked my bank to automatically pay off my credit card in full at the end of each month. (It might help that my credit card is affiliated with my bank, I'm not sure.)

I've never come close to spending near my limit, so I don't know about an overdraft fee. I assumed it would decline further payments.

My credit card gives me reward points for money spent on it. Having a credit card that I keep paid helps my credit score.

I make some tiny amount of interest on the money in my account each month. I might as well collect that before parting with the money. And it's not like credit card debt accrues daily.

As a european my question is exactly the opposite, why would you ever use a credit card if you can just pay directly with the money you have?

The concept just seems to bizzare as someone who has grown up with their country specific bank cards - getting a credit card or even a visa/mastercard debit card is something fairly unusual.

I do realize you american people have to build a credit score and there's cashback schemes. Very different cultures I guess

Well one reason people use credit cards a lot in the US is that it is much easier to dispute a payment charged to a credit card then it is a debit card. Additionally a charge on a credit card is not money you currently have it is more potential money, whereas a charge on a debit card is tied directly to your bank account and can take a while to be returned in the case of fraud. At one point you used to be basically SOL if fraud occurred using your debit card.

The concern over fraud goes the other way in Europe. We don't like the "pull" model and worry about our card number being used without our authorization. Debit card payments usually require card presence and PIN for each transaction, making stuff like that impossible.

>Debit card payments usually require card presence and PIN for each transaction

Presence and pin? How does that work online? Even if it's pin only, aren't you still screwed if you get phished?

Not for online, for physical purchases. Another fundamental/SHOCKING difference between Europe vs USA is that when you pay with your card in a restaurant in Europe, the waiter brings the POS over to you, while in the USA the waiter disappears with everyone's cards for 5mins ;)

Not good security is it? They can take their time to scan/photograph the cards etc, while in Europe the card's details are for seconds and right in front of you.

Online payments usually go through something like 3DSecure, where you get redirected to your bank and need to authorize the payment amount with a digipass or card reader, which require a PIN.

Yup - credit cards offer incentives (for example, 2% cash back) - I can't think of any good reason not to get one and have it set up so that it automatically deducts the balance from your bank account once a month - this makes it effectively a debit card where everything you purchase is 2% cheaper.

I have no self control to pay it back on time.

Why would you ever want errors to reported while they are happening, instead of at the end of the month?

Credit card = Loan

Debit Card = money in the bank.

I am not trashing the credit industry, but when they give me 1% and I give them 24%...

And in the UK I do get a refund for fraudulent purchases (e.g. someone copied my card details from a store and made some purchases of women's shoes from somewhere in the UK I have never veen) - NatWest flagged it, alerted me, refunded me.

sadly, because of to much fraud i guess, china now doesn't allow more than one account per person (it's actually per bank, but i suspect only because it's not easy to enforce across multiple banks)

with that restriction in place, 2 or 3 accounts is manageable, but 7 almost impossible.

ideally the bank should allow to split your account into sub-accounts. so that nominally (for tax and monitoring purposes) you still have one account, but for money management purposes you have multiple.

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