Hacker News Reader

> The reason is that in the event of a fraudulent charge

Not sure if a fraudulent charge of a debit card is a thing I ever heard of in Europe. These cards have also been using chips for over 20 years. Maybe they work differently here.

To me credit cards sound less secure than debit cards: debit cards have chips and pin codes. With credit cards, knowing the number is in theory enough (they have digital verification now too though). Also, with debit cards, you put it in the payment terminal yourself.

With credit cards, in the US I've had the waiters in restaurants taking your credit card from your table, walking to somewhere else with it, and giving it back to you later. I had never seen that before (In Europe, they carry a portable payment thingie in which you can put/tap credit or debit cards to the table). How is that more secure? They could easily copy the number there.

That credit cards don't have PIN codes has nothing to do with them being credit cards vs debit cards, it's just a choice by the industry to not institute them.

It is less that cards don't have PINs for the chip, but that they still have magnetic stripes. It is still possible to skim the card info. I assume that there is mandate to update equipment but I still see registers with swipe. Issuers can distribute cards without magstripe in 2027. But they keep pushing the date out.

IIRC with most credit card purchases in the US, if the retailer only takes magnetic strips, they're liable themselves; if the issuing bank doesn't offer EMV cards, then they're liable; after that is the credit card company I believe, who has an option to put up to $50 liability on the owner (though they rarely do).

In the US, fraudulent charges are rampant. The default expectation is that a card eventually has fraudulent charges.

A slightly different but similar issue is paying for services in advance but never rendered. When that happens on a credit card I just inform the card issuer and they handle it.

Generally I've seen this happen when you've contracted to do business in some form and the other side reneges on it in some way. Like you ordered something online and it never ships.

We were going to get a large water purifier from Costco. On the order of $6000. We paid, but we had 3 days to cancel. We found it for significantly cheaper the next day and cancelled. 3 months later Costco still hadn't reversed the charge, so we challenged it with the credit card company. Fixed in 24 hours.

Also, it's worth pointing out that when you challenge something successfully, it's effectively like it never happened. Interest gets rolled back and you can call to have late payments associated with that time period striken from your credit report.

On the flip side, I would never use a debit card. I've been told "your pin was used so it must have been you" when contesting small things there. Credit card have chips and some banks allow you to use pins.

The U.S. has legislation limiting consumer liability of credit card fraud to $50, and many cards will further waive that to $0. It's just simply not the consumer's problem if someone copies their credit card number and uses it for fraud. They just have to call the bank to report the fraud, and then the bank will cancel the old card, issue a new one, and then it's the bank's problem on how to get the money back.

Chips don't make the cards more secure. They just shift liability back to the consumer making it cheaper for credit card companies.

If someone steals your card and can guess your pin, then you're out of luck in filing any claim because obviously you disclosed your pin.

Same. I have a debit card that I literally only ever use to take money out of a secure bank ATM (the ones attached to actual branches), or ID myself at the bank teller.

Every single thing I'm actually paying for goes on one a handful of cards.

There is zero chance that I, a US resident, will ever use debit cards for anything.

Does being a US resident have any meaning here? I mean, does the rest of the world not secure credit card payments, or does the rest of the world secure debit card payments like the US secures credit card payment?

I assume the rest of the world is less stupid/greedy than the US here, but honestly I have no idea how this works elsewhere - that's the reason for the "US resident" clarification.

People are equally stupid/greedy around the world. Different countries have different laws though, and that makes a major difference.

There are things which come with being the richest country and a really populous one - you're targeted by all kinds of scammers who view you as the best target. Similar to how startups try to serve the U.S. market since it's 300 million relatively wealthy people. You could start your startup in Germany, but is the market there for what you're doing? Scammers use the same logic.

In the US if your credit card number is compromised you are legally out at most $50 (I haven't checked in 20 years so this may have changed, my comment is at least partially historical). In almost all cases the bank will just wave that $50 as they are already paying the rest. If your debit card is compromised the money comes from your account and legally they don't have to return it to you, instead you need to figure out who defrauded you and collect (my info is 20 years out of date so this is almost certainly wrong), though in practice the banks will probably return your money and collect on your behalf but this takes a month.

Note that the above is about the number, which is not secure in any situation. You don't need to have someones credit card, you just need to know the numbers. If you compromise an insecure website and get these details (bank rules don't allow storing the numbers, but if the website doesn't follow the rules). You can also take a picture of a card as someone is scanning it.

Europe went to the chip and pin system, plus a system where they bring cards readers to each table because they did not have the above protection for credit cards. Thus in Europe you would be a fool to let your waiter take your credit card to a backroom to pay for a meal because the waiter can then copy the numbers and/or the magstripe, and then use your credit card after returning the physical one to you (again, this is 20 years out of date, laws have changed but I don't know how!). Since the US has (20 years ago) better consumer protection laws around credit cards, people didn't care that chip+pin was more secure as practically it didn't make any difference, and for a while banks figured it wasn't worth caring. Once banks started caring everyone switched to the chip in the US - but we mostly don't use a PIN as the annoyance of needing to remember a PIN isn't worth putting on consumers here. (also Europe has made the portable terminals cheap so you find a lot of portable terminals here as well so cards are less likely to leave the owners hands thus making the PIN less important)

In EU law all payments get pretty much the same protections as USA credit card payments, even for debit cards the customer is legally out at most 50 EUR, so there is no advantage in it being a credit card.

The motivation of Chip&PIN in EU is driven by the fact that banks are forced to cover most of the fraud costs (as opposed to USA, where much of stolen card fraud is forced upon merchants), so they have a motivation to actually prevent it; and the inconvenience of PIN is mitigated by highly prevalent contactless (and PIN-less) chip payments for small transactions.

Yes, the residence matters - in USA (and some other countries, I think at least UK as well) there are major legal differences between debit cards and credit cards with respect what the consumer rights and practical protections are for them, and in other countries (like in EU payment laws) debit card payments get all the same or almost the protections as credit card payments.

Yeah, I don't use rewards or loyalty programs at all; I don't like giving over the headspace to corporate manipulators. But I still use debit cards very carefully because of the better protections from fraud for credit transactions.

The rise of the chip card may have fixed that; it's been a long time since I've had a problem. But I'm reluctant to find out.

I will say, it seems better than it used to be in the pre-chip days, but I've had to replace my primary CC once already this year due to an obviously fraudulent charge. To the credit of my bank, it was virtually painless - I had a new card in under 24 hours, and I didn't have to think about the $2000+ charge at all until they confirmed (two months later!) that it was in fact fraud.

Agreed. Using flat 1.5% cashback cards with autopay + setting the cashback balance to auto apply to each statement is the convenience compromise I have found

If I use a credit card, I pay up to 20% on the outstanding amount. If I use my debit card, I get interest on the money that I don't spend. I also cannot spend more than what is in my account. If there is a charge I disagree with, I can easily reverse it without any cost. And I have never met anyone who had a fraudulent charge (without being dumb). To me, I cannot understand why anyone would use a credit card unless debit isn't accepted. I use that card maybe once a year for paying toll on the highway.

> If I use a credit card, I pay up to 20% on the outstanding amount.

Key is never having outstanding debt. Pay your credit card balance in full. Most people with credit cards do this. I have never met anyone who paid any interest on their credit card because everyone I know pays it in full each month.

> And I have never met anyone who had a fraudulent charge (without being dumb).

And? The point is if it happens, you are far safer with a credit card than a debit card. Once the money is gone from the credit card, it's the credit card companies problem. Once the money is gone from your debit, it's your problem.

> To me, I cannot understand why anyone would use a credit card unless debit isn't accepted.

Because credit card is more secure. As the OP already told you.

As long as you have financial discipline, using a credit card is smarter than using a debit. It's a simple concept.

Paying your credit card off fully every month ensures you don’t pay any interest (use it like a debit card). Wrt the earning interest point, consider that with a credit card you still get interest on the money you don’t spend, and you can also collect interest on the money you do spend (eg I buy something for $100 on the 15th, I can collect interest on the $100 until I have to actually pay the bill on the 1st of next month). Not to mention that you also pay 1-1.5% less for everything you use a card for due to cashback schemes. I definitely see why it might seem weird the way Americans use credit cards but it is mostly rational.

Yup. For a responsible user there simply is no downside to using a credit card in most situations.