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Comment by bediger4000 | Hacker News Reader

I worked on credit card processing at a Visa Level 1 merchant, 2001-2003. Amex was far more difficult to handle than any other type of card. 13 digits in a card number, 4-digit CVV, other weird problems that other card types didn't have. Small businesses dislike taking Amex because the per-transaction processing fees are bigger.

As a consumer who got in trouble during the 2008 depression, I will note that Discover is less forgiving, and quicker to sell your debt to debt collectors than any other bank.

My take is to avoid both as a consumer, if you can.

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My dad worked at a hotel and he noticed that anytime Amex card holders did a charge back, even if their signature matched their ID, they'd always pull the funds, and the hotel would lose money.

We got Amex after that, since it means if we ever have a true theft/card skim issue, chances are high they will back us, instead of putting the debt on us. If that ever changes, I'll ditch them. The small shops might not take them, but every gas station does, and I rather not pump gas with my debit card.

why would you ever use a credit card if you have funds available for purchase on your debit card? especially for small purchases like gas, seems like an unnecessary way to build up debt.

EDIT: I was unaware of all the below listed advantages for using credit cards, especially about % cash-back opportunities, no idea if my bank also supports something alike. Anyway, thanks, I have to investigate/rethink how I pay from now on.

EDIT2: I just learned my country does not support cashbacks, not in any one of the banks.

I do 99% of my daily spending on credit cards and have never once in 40 years paid interest on a credit card.

Buying something with a credit card does not mean you never pay it back.

I pay off my credit card every month so no debt. Can you do chargebacks on a debit card?

You can charge back on a debit card, but the money doesn't get back into your account right away, and of course until you realize what is up your bank account is down that money (or even negative) and you thus don't have that money to spend. If your account is negative you are charged bank fees - I'm not sure if they will refund them, but at the very least until the investigation completes you are out that money as well.

which is to say if there is fraud a debit card will eventually fix you, but while things work through the system you have no money for day to day life. With a credit card you don't pay that part of the bill and so your money is still there for day to day life.

All that’s true and you should always prepare for the worst case. That said, I’ve had a couple fraud events over the last few years before insulating layers like Apple Pay were widely available. I’d pay for dinner at some sketchy restaurant, then a month later someone’s using my card to buy gas in Tijuana (real story). My credit union was amazing each time. They’d immediately issue provisional refunds for the fraudulent amounts, waive any fees, and have a new card in the mail a day later. It was inconvenient to be sure, but the credit union made it as painless as possible.

For me it's very convenient to have all purchases listed in the same account, also saves me time in decision making. As for debt, that's what budgets are for.

I only ever use my debit card for cash withdrawals, and I purchase exclusively on my credit card.

Why wouldn't I? My direct debit clears the balance every month so I never pay interest, and I enjoy a couple quid of cashback and better consumer protections.

It shields you from getting your debit card skimmed. The credit card is also easier to contest if there is an issue. If you pay your credit card balance off every month, you never end up paying interest either. Finally, you can accrue points and rewards spending money you already planned to spend.

If you are responsible and pay your statement in full each month, it’s free money. My particular Amex card gives me 5% cash back on gas and groceries and has no fees. This translates to ~$1,200 per year.

Which Amex card? The ones I've seen cap the total purchase amount for rewards for gas/groceries at a low enough level that the rewards max out at a few hundred a year. (Cash Magnet's cashback is universal and unlimited, but the 1.5% rate is less than Wells Fargo Active Cash's 2%.)

It's just called "Blue Cash", not "Blue Cash Everyday" or "Blue Cash Preferred". It seems like they don't offer it to new applicants anymore. The only downside is that you have to spend $6,500 before the 5% cash back kicks in for groceries/drug stores/gas stations, though I usually hit that in a couple of months anyways.

edit: more info here https://www.reddit.com/r/amex/comments/12r91y4/what_happened...

I had that card almost 20 years ago, until Amex abruptly closed both that and my "Student" Amex Blue that had very few benefits. Their letter referenced that "something on my credit report" and apparently the one forgotten payment I'd had recently, to Macy's for $60 (forgot I had used the card) was an unforgivable sin, surely portending a bankruptcy filing in their view, I guess.

I harbored a grudge over that for about 15 years, but finally got back on the Amex bandwagon with a Gold card a few years ago. 4 points per dollar on dining and groceries works out really well for me.

Treat the credit card as a middleman between your actual cash (e.g., a checking account) and spending. Spend as if it's cash. Pay balance weekly to avoid ever paying interest. Enjoy far superior fraud protection, and an effective discount of roughly 1–10% depending on credit card perks.

>Pay balance weekly to avoid ever paying interest.

Perhaps counterintuitively, that is bad behaviour. If you pay before the billing cycle comes due, the banks will first insist you don't need a high credit limit and they will also insist you're a financial risk.

The best way to pay credit cards statements is to wait for the cycle to close and then pay the statement balance in full. You should only make a payment in the middle of a cycle if you need more room in your card's credit limit for an upcoming purchase(s).

Do you need a very high limit? I pay every other week and my limit is already higher than my paycheck usually is, so I'm not sure what I'd use an even higher ones for?

Part of your credit score is the percentage utilization of your available credit. So you want higher limits that you'll never use in order to make that percentage smaller and thus your credit score higher.

Silly game but might as well play it.

for the times when you actually want to put something on the card, like plane tickets and hotels

Higher credit limits mean many good things:

* The bank is confident you will pay back your debts.

* Your credit utilization will be lower relatively speaking, which banks really like.

* You can put more spend on your card if and when you really need to.

It's always worth waiting for the billing cycle to close before paying the statement balance if it is practical to do so.

Never know when you're going to need to buy a car and drive to Mexico. :P

I have my cards on auto pay on due date. Works perfectly.

Oops. TIL I've been doing it wrong for years. Thank you for sharing this tip!

>If you pay before the billing cycle comes due, the banks will first insist you don't need a high credit limit and they will also insist you're a financial risk.

Not my experience at all. I pay multiple times per credit cycle and have never had an issue getting CLIs. My total available LoC is a few of multiples of my annual income and the only reason I stopped asking for CLIs is because I got bored with it and had enough available credit that I basically never carry more than a 1-3% total balance even if I'm floating large purchases.

I'd go farther and suggest that this advice is potentially harmful with the recent changes to FICO scoring where balances have a rolling average impact -- having a balance hit your credit report because payment posted after your bank's reporting date will now follow you for considerably longer than in the past.

Discover and AmEx are pretty generous with CLI requests IME. I went through a period where they both seemed intent on being my highest LoC card and would often unilaterally extend a CLI after a CLI from the other hit my credit report. BoA is also fairly generous. Citi and Chase seem to extend more grounded credit lines. Wells Fargo is hilariously stingy.

The big thing with any of them is asking, though. None of them unilaterally offer CLIs very often IME.

All IME, YMMMV.

I also had my debit card skimmed. Contacted the bank the same day but funds were locked. So, I ended up just using my credit card for purchases in the long run until the dispute was resolved. FWIW I am hyper vigilant looking for card skimmers at gas stations, etc. but somehow I still was targeted.

I get an average of 2.5% cash back on all purchases made with my credit card. I pay the balance in full each month and have never paid an interest charge. Why on earth would I not take the free money?

On the surface it seems like we’re comparing two similar pieces of plastic that provide mechanisms for transferring cash from a purchaser to a vendor, but I think it’s more useful to think about the contract terms that you, the purchaser, agree to when you transact using one or the other.

For example, the ability to “claw back” funds transferred by credit card gives the purchaser much more confidence when dealing with an unknown vendor. Debit cards introduce more risk that funds can’t be recovered if the purchase has not been fulfilled or otherwise gone bad.

You know how you get an 800+ credit rating? Put all of your normal expenses on your credit card and pay it off monthly. You only accrue interest on a card if you have a balance on it that carries over. If you pay it off every month you don't.

I almost never use my debit card. Its inherently more risky because it's directly connected to your checking account. A credit card isn't. If its compromised, it's much less damaging financially and easier to reverse.

still have to be careful about going over credit utilization...

Yes and no, high utilization dings your score for the month you made the big purchase but returns to normal once it's paid off. If you routinely have high utilization CCs will just increase your limit so your normal spending is in the ideal range.

> You know how you get an 800+ credit rating?

You can also game it by repeatedly running up large balances and then paying them down to zero right before the next reporting cycle.

It's really good to have a level of indirection between your purchases and the account where your hard-earned money sits.

If you have to dispute a charge it's much nicer to dispute it when it's on a credit card bill than when the money is already out of your bank account.

Think of it like a bastion host for your money.

I get British Airways avios points and flight companion vouchers with mine. I only purchase things I would have otherwise already brought without it, like food shopping and fuel etc, and pay the balance to zero at the end of every month. I have no interest in using it for "genuine" credit, like buying something you can't afford and paying it back in chunks later.

The main reason is because in the US if someone skims your card at a gas station and charges money to your account, it is next to impossible to get your money back from the bank. A credit card company is more likely to refund the transaction on the other hand.

That's not true. Debit cards have fraud protection similar to credit cards. But the big difference is that you have a smaller window to report the issue, and while it is being resolved, you're out of the money instead of the bank. And it may be a bigger PITA if you need to close the account.

> That's not true. Debit cards have fraud protection similar to credit cards.

Similar being the key word. Yes they are somewhat similar, but credit cards have better protection by regulation, so they are not the same.

https://www.experian.com/blogs/ask-experian/are-credit-cards...

The two day reporting on debit cards is particularly risky. I very actively review every transaction, but only about every two weeks at best or once a month at worst. With credit cards this is not an issue.

That's 2 days if you physically lose your card. Otherwise you have 60 days after you receive your statement. If you know where your wallet it, and you review statements once per month, you're fine. I still use a credit card instead, though, because I'd rather the lost money be the bank's problem to resolve.

Credit cards often have extended warranties in the US. Once two of our Android phones failed due to a defect a few months after warranty expired. I called up the credit card company and they returned the full amount for both phones with minimal fuss.

The % cash back we accumulate to buy fun stuff for the family. Like a new laptop or video game system.

Also we pay off our credit cards monthly so there is no debt buildup but the activity helps maintain a good credit score. Some people fall into the mindset that a credit card is an extra source of money.

In the UK, the credit card company is jointly liable with the retailer for breach of contract for purchases in the £100-£30,000 range. This is called Section 75 protection (from the section number of the Consumer Protection Act) and offers much more protection than the chargeback offered by debit card providers.

Fraudulent transactions. Debit card - you are out the money until you sort it out with the bank. Credit card - you’re not the out the money, it’s the bank’s money.

Exactly.

Putting aside whether the points & benefits value are the best in the business anymore (I think they all got a lot worse post ZIRP)..

Amex gets the majority of my spend because they are cardholder friendly and easy to deal with. I never spend time in opaque phone trees, waiting for callbacks, on hold or having to argue/escalate any issue.

Their website is good, their phone support is good, and I feel protected using the card vs having to deal with some random issuer of a branded Visa / big dumb bank / etc.

Just don't travel to Europe, you will struggle with amex here. Almost unknown at any selling point and as per what others post for good reasons.

not so in the UK, especially London. strong presence. they’re accepted even at local shops where they dropped their fees in order to encourage adoption.

I keep a backup Visa card and actually 99% of the time Amex and some petty cash is still fine in my Western EU travels.

Ironic, in that American Express (AMEX) traveler's cheques used to be (before credit cards were common) a nearly universal way for American tourists to carry cash when traveling anywhere in Europe, you could always exchange them for the local currency, and they would be replaced if lost/stolen.

I've travel in Europe a bunch (CEE, Scandinavia, and UK) for work and pleasure and Amex has always worked for me. I can only think of a handful of times where I had to revert to my Visa instead.

> don't travel to Europe, you will struggle with amex here

Depends on the country. Worked fine in Portugal, Italy, Norway and Britain. Less so in France and Germany—they have influential financial centres.

My experience in the EU with Amex:

Good coverage in London, UK but not as much as the US

only fancy restaurants in France/Spain

some small biz places in Venice, Italy but probably only because of the Venice Biennale was sponsored by Amex and their sales people did a push.

TL; DR If there is a large local banking lobby, Amex won’t work.

Live in Germany, use Amex works at 60% of the time. Visa 80% of the time. Many businesses are cash only (less after Covid)

You use credit cards 140% of the time??

The dude LOVES credit. Sometimes he pays for something twice just to flex.

In the Uk and Ireland I have a >95% success rate with it. I was in Germany recently and had a 0% success rate.

Europe is a big place.

Are you trying to use it in tourist areas or not? It makes a big difference. My employer a few years ago was bought by a US company who switched the corporate cards from Visa to Amex, and after that, every business trip to Ireland from the US offices had someone needing to claim reimbursement for paying without the company approved card as the Amex got rejected at least once on each trip. We used to joke that it was an attempt to reduce the cost of expenses by annoying people with the paperwork when the Amex was inevitably declined.

In Ireland/UK nope, in Germany yes!

I live in Australia when I first signed up for a credit card through my bank they issued me with both a Mastercard and an American Express card linked to the same credit account. It seemed to me they really wanted to push Amex as they offered higher reward points etc for using it, the problem was almost nowhere accepted Amex whilst Mastercard "just worked" everywhere.

Eventually my bank cancelled the Amex card and they no longer offer American Express. I never really noticed because I hadn't used it for years at that point.

Their support is so good. I’ve only called them a couple times, but each time it was like: “ring ring Hello Mr. Strauser, this is Joe at American Express, how may I help you?”

The time from hitting the call button to talking to a human with my account information in front of them sets the standard.

I've had a 100% successful chargeback rate with Amex, thus far.

I like that Amex chargeback is treated like (or is) an insurance policy on your card. So, you get successful chargebacks 100% of the time and typically within a day. They then investigate and try to claw back the refund you should have gotten or if they find that you tried to double-dip (service refunded and amex refunded) then you'll get charged again -- that will only happen if you're trying to commit fraud.

Where it shines is times where the merchants give you the run around. For instance, I put $500 down on a vehicle in a refundable deposit. When it came to cancel it, I was given the run around between dealerships and manufacturers, no one wanted to pay out. I made the effort (sent an email), and then clicked one button on the Amex website for the charge and got the money returned in a few hours.

Try charging back anything to do with a rental car. Pretty much all the card issuers, including Amex, will leave you high and dry.

I love Amex generally, but they are the sole card issuer who has outright denied charging a vendor back - or even blocking future transactions.

I had to close my account to get it to stop. Not even reissuing a new card helped due to the protocols vendors have now to do recurring billing over number changes.

Just a word of caution for an anyone taking this as gospel as I did.

Anecdotally, Discover took less than 10 minutes from dialtone to ending the call to return $1k back to my credit after having been hacked and texting "ACCEPT" at 4AM to an insane $ amount that I assumed was a bill.

Hack/Fraudulent charges are usually easy for cards to handle.

1. If you claim you’re calling for a fraudulent charge you’re almost always prioritized in customer service.

2. The algorithms they use have become pretty good at identifying fraudulent charges. In fact, the few times I’ve had fraudulent charges, each time my Chase/Amex card fraud departments reached out to me before I was even aware of the charges.

As a consumer in the UK, I would wholeheartedly recommend Amex... they've always taken my side and even actively argued my case against "rogue" retailers and companies whenever I've had a problem... their customer service is exceptional compared to almost any other company I've had a card with.

their customer service is exceptional compared to almost any other company of any kind I've dealt with

Totally agreed

Even when I cancelled my card (fee based) they did it within about 60 seconds, no attempt at retaining me, automatically issued a pro rata refund of the fee etc. And the chargeback process has always been a breeze

> As a consumer who got in trouble during the 2008 depression, I will note that Discover is less forgiving, and quicker to sell your debt to debt collectors than any other bank.

Discover does lots of subprime lending so that makes sense, sell the debt off quickly to get the most pennies per dollar for the bad debt.

As a consumer, Amex treats me well. Both under normal and exceptional circumstances, that's rare in consumer business relationships.

Amex has the highest fees but also the wealthiest consumers. So business have to begrudgingly put up with it.

> 13 digits in a card number

I think you mean 15?

Pedantic but correct. They just had to be different.

> 13 digits in a card number, 4-digit CVV, other weird problems that other card types didn't have.

> Discover is less forgiving,

> My take is to avoid both as a consumer, if you can.

These don't seem like equal complaints. I would recommend Amex if you are a high-spender and pay your bills on time every month. They have way better customer service and perks.

> Small businesses dislike taking Amex because the per-transaction processing fees are bigger.

Even some larger ones. I keep getting emails from Ebay saying they're not going to accept Amex soon.

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