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Comment by rfoo | Hacker News Reader

An interesting fact is in China even traditional credit cards have significantly lower fee. UnionPay only charges around 0.6%. Not comparable to Alipay or WeChat Pay's effectively 0% but still.

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Do American consumers spend a lot more money on American credit cards than European consumers spend on European cards?

Obviously I think the fees are pointless.

As an American, the only thing I don't spend on a credit card is rent (because my landlord doesn't accept it).

It's silly not to pay for everything on credit cards here, when you can get 3-5% back on anything with the right card. That's around $4k/year if you spend $100k before even accounting for doubling on some cards and other benefits like travel vouchers, Uber credits, and free insurance coverage. (Minus a $600-$1000 a year in annual card fees for high end cards.)

You aren't getting 3-5% cash back unless you are using tons of different cards for different types of purchases and are also keeping within limits.

There used to be a 3% cashback on everything card with no limit. Now 2% is the best and difficult for most people to get.

You can get 5% credit back with an Amazon Prime card but only on Amazon.

Most other 3% or more back are either limited to a niche category and/or capped. (Like 6% back on groceries, but only for the first $6k).

I imagine that spending is dominated by a few major categories, which you can find specific cards to cover. There are spending limits, but you can always get multiple cards. I do that with BoA, I have 2 basically identical credit cards, but each has a different bonus category set, or I can set both to use the same category like dining out.

So unless you're spending like 200k net a year on life expenses, it's pretty easy to get the max returns.

You can get a pretty good, simple system set up with Chase CSR and FU, supplemented with the Amazon card. Just have to remember to use the CSR for the relevant categories, which isn't that hard.

You need to have a good credit score and be fairly well off to get a CSR though.

As an American, I don't care if I get 0% back, I'm still using a credit card because the identity theft protection discrepancy between credit and debit cards is enormous. I say this to people and those who have had to deal with identify theft before immediate are on board with me. Those who haven't proceed to argue.

As a European, could you explain this a bit ? How does identity theft differ between credit and debit cards ?

Basically, when you purchase something with a credit card the bank fronts the money to the merchant and bills you for purchases later. If a transaction is fraudulent, either the merchant or the credit card company take the hit, and you're never out any money, even temporarily. For credit cards the market has settled on 0 consumer fraud liability pretty much no matter the circumstances (and very hassle-free too).

On the other hand, with debit cards money is withdrawn from your account when a fraudulent purchase is made, and you need to wait for your bank to complete an investigation to reimburse you. They also tend to have rather stricter reporting standards in that if you don't report fraud promptly, you might be stuck with (some) liability.

Either way you'll typically get your money back, but the hassle is much reduced with credit cards.

The US (and Canada) have much weaker consumer protections for debit than credit.

If a merchant posts a fraudulent transaction against a credit card, you'll most likely get your money back. If a merchant posts a fraudulent transaction against a debit card, you might not get your money back.

More dangerously, if your debit card credentials are skimmed and used to withdraw money from your account by any means other than the retail debit-card payment system, you won't get your money back.

> you can get 3-5% back on anything with the right card. That's around $4k/year if you spend $100k

How in the world would a tpical person spend that much? That's over $8000/month with credit cards!

Also... aren't your 5% cards capped at like $1500 spend per quarter ($500/month)?

Do you use cash back cards in your own life, and does your usage even vaguely match the numbers you suggested here?

Then China must not have 2% to 5% cash back rewards on their credit cards.

Yes, instead, product prices are correspondingly lower (and then some).

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