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Comment by pnpnp | Hacker News Reader

> You can blame the evil competitor but the real problem is that credit cards are not the right tool for payments to strangers over the internet.

Granted the entire system needs a revamp, but credit cards are one of the best tools we have to pay strangers right now. Credit card money isn’t your money being spent, and comes with a fraud guarantee. I would rather use a credit card than something linked to my money in a checking account for sketchy transactions.

Yes, it’s a hassle when the card number inevitably gets stolen, but NFC payments, etc are starting to tackle this.

One thing I’ve seen a lot is people misunderstanding credit cards. If you pay them off monthly, you usually get some kind of reward and additionally a huge layer of fraud protection from your personal finances. That being said, I also can’t wait until more secure credit card systems become more prevalent.

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In much of the world, the "credit card" payment goes through a pre-paid card. Then you're actually putting your own money on the line, and even if there's a guarantee, it's a pain to actually go through the process of invoking it.

If this is one of the best tools, then I'm really dismayed at the state of payments around the world. SEPA bank transfers are so much better, even if they have other problems.

Define "much of the world", because that is absolutely not how credit cards work.

Paying with a credit card means your credit card company pays that charge for you. Yes, you are borrowing money from your credit card company.

Once a month (or whatever your billing cycle is), you receive a statement showing all the charges on your credit card. The statement will also show any credits if applicable (eg: refunds). The sum of all charges and credits is called the balance.

At this time, if you spot any suspicious or fraudulent charges on the statement, you call your credit card company as soon as possible to dispute those charges. If they are indeed fraudulent, those charges are reversed/removed.

If the statement looks fine, you pay your credit card company whatever balance is shown on the statement.

Note how your own personal money only comes into contact with the credit card at the time of paying off the charges on the credit card, and only after confirming the charges are legitimate. The credit card company has a vested interest in fighting fraud because it's their money on the line, not yours. This is why credit cards are considered safe and widely popular.

Contrast debit cards and banks, where all charges on your debit card come into contact with your own personal money immediately. Banks don't have a vested interest because it's your money on the line, not their's, so they won't be nearly as enthusiastic about fighting fraud on your behalf.

You’re definitely correct in how credit cards work, but I’d like to make one wording change:

> Contrast debit cards and banks, where all charges on your debit card come into contact with your own personal money immediately. Banks don't have a vested interest because it's your money on the line, not their's, so they won't be nearly as enthusiastic about fighting fraud on your behalf.

The credit card issuer may be a bank and for most new credit card holders, there’s a decent chance it is their main bank (e.g. BoA and Chase in the United States have many credit card products).

Also, with debit cards, the federal Electronic Fund Transfer Act does limit liability for the card holder.

Source: https://www.federalreserve.gov/boarddocs/caletters/2008/0807...

This is not how credit cards work, because the system of "credit card payment" is typically used with things other than credit cards. At least in Europe you go through extra expense and hassle to get a credit card, if you're even allowed.

If someone says "credit cards" to mean things that aren't credit cards, that's not really my problem.

Let me put it in another way: there's no "credit card payment system" for payments over the internet. There's Visa, MasterCard, whatever other "card" system. Those don't just facilitate payments for credit cards, but also for other kinds of "cards", which, in my experience, are no less common. Talking about paying by card over the internet doesn't make sense without considering that hordes of people don't use credit cards for that.

Is it? Last time my card was used in an unauthorized way, one phone call to the bank locked the card and had a replacement the following day, and I got a letter a few weeks later for me to sign to confirm it was a fraudulent transaction, that was it.

> you usually get some kind of reward

What kind of reward? I’ve always paid mine off each month and never gotten a reward on any of my ~15 cards.

cash back? airline points? I would say you must not be American but you said you have 15 cards so I don't know what to think.

I think it’s possibly your wording that had me confused.

> If you pay them off monthly

You get the things you mentioned whether or not you pay them off monthly or just pay the minimum and carry a balance. You just have to remain “in good standing”.

My cc number is useless without access to my bank account. The hacker would also need to steal my phone and bypass the fingerprint scanner somehow to get in there.

>One thing I’ve seen a lot is people misunderstanding credit cards.

Practically all the credit card haters turn out to not understand credit cards, it's almost hilarious. Are people not taught even the very basic of financial know-how from anyone?

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