Majority of EU population. Even in US debit is more popular than credit in 18-25 age bracket.
I know people with terrible credit may have problems getting a credit card, and others may have trouble not treating a credit line as spendable beyond their means, but everyone else should keep the 'debit card' at home or at least confined to their wallet.
1. Paycheck DD → straight to savings
2. "Spending money" for in-person transactions → transfer periodically to checking
3. Use debit card to spend from checking.
That's an interesting idea. Actually what is intriguing to me is another angle: I'd still never consider spending with debit. But my problem is that it's essentially impossible to get an ATM card that isn't a debit card anymore, meaning if I want to be able to use an ATM, I have to carry this stupid card around that would be easy to use to drain my checking account. With your approach, if I can get a savings account that is not linked to a checking account, I could use that as my default place where I pay my rent and credit card bills from. But it's a big if, because a lot of savings accounts have limits on how many withdrawals they can have per month, probably a residue of that regulation that someone else said was recently repealed.
This way you're not actively having to top off your normal spending account, but at the same time have a backstop in case that active account gets hit by fraud or whatever.
I'd suggest protecting yourself even further and having those accounts be split across two different banks. This way if one of your bank credentials gets hacked or you have some issue with the bank you at least have a chance of still having an account with cash someplace else to cover the short term.
I've had this happen to me twice in about 25 years. Neither bank made me wait weeks.
The most recent one (with a giant megabank) issued a provisional credit in under an hour.
There seem to be a lot of people in this thread who have never actually been through this and are just apeing what other people say online.
U.S. banks largely give debit cards the same protections as credit cards for at least the last 15 years.
Yes we'll open a dispute. Yes we'll give you a credit immediately. But then we just take the sellers word for it that they're trying to make it right and charge you anyway.
This is my one singular experience with a dispute but that's with a big bank getting almost all of my transactions over the course of years....
Relatedly, the credit card system is truly a tragedy of the commons situation.
It's a ~2% drag on the economy for what? For some silly points with constrained value and an excuse to not build better financial infrastructure.
The frustrating thing is that, given the current equilibrium, you're a sucker for not using a credit card - you end up subsidising those who do.
High tier cards are more expensive to accept, unless your merchant rate is a high enough flat rate that it covers the average and then some.
So assuming the rest is all the same, you just paid exactly what you would've paid with a debit card. Because the merchant had to raise prices to accommodate the fee. And that's with the credit card company not taking a cut and we all know that's not true.
There are merchants that do not do this, such as Target, which charges 5% to use a credit card. Insurers/tutors/daycares/schools/healthcare providers/contractors/gas stations/restaurants/governments/utilities are also known to frequently charge more for credit card payments.
Any seller can choose to offer a lower price for debit card / ACH / Zelle payments if they want to.
points are just premiums: some insurance consumers are a greater risk, and so pay more.
any convenience features are built on top of the insurance product: _because_ all players are covered, _therefore_ i can make online purchases. _since_ (i have a justified expectation that) i am not liable for fraudulent use of my account number, _therefore_ i can read it to a customer service rep over the phone.
we can of course debate whether 2% is a good price for this coverage! but there must be some price paid here -- if the insurance broker doesn't collect it, the scammers will. this, after all, is the real tragedy.
Also, that means the person had the PIN too? That becomes harder to defend
I've been through it personally and with friends.
My experience was basically yours. I am a relatively highly paid professional with a large amount of assets with my bank. I get pretty good service, even at my giant national retail bank. I call, make a demand, they tend to just do it without too many questions.
My more low income friends have also gone through it, and I've assisted with them since they were panic'ing. Their experience is absolutely nothing like mine. Every single one spent days to weeks being sandbagged by sometimes the same bank I dealt with on my issue.
Your experience will very greatly depending on how "valuable" of a customer your bank feels you are to them.
> U.S. banks largely give debit cards the same protections as credit cards for at least the last 15 years.
On paper, sure. In practice, no. Funds frozen during an "investigation" matter a whole lot more when it's your money vs. a made up credit limit number that wasn't real to begin with.
Slowly over the next three months the charges were slowly reversed. In the end the bank didn't reverse all of them, but my friend did get most of her money back.
Even better, our small town (pop. 100) gas station upgraded their pumps a while back, and they have NFC! Finally my normal fill-up location is skimmer-resistant. Or is it skimmer-proof?
Put a reader with a shield on the pad and a new pad on top and a small terminal in somewhere out of sight. You won't know the difference. Requires infrastructure though so it is a bit more complicated and a lot more noticeable. Likely used the non-pin entry limit which is always reset after you payed a large amount and had to enter your pin. Not like the strip readers of olden days.
Anecdote: We had a "chip charge" system where you put money in your card via a ATM like device and those sometimes had strange "extensions" in front of it which read your chip while you charged it and immediately took the money. People often don't know what too look for when it comes to skimming devices and with tech it may look like a strange but genuine device.
All other spending should go onto credit cards, for numerous reasons that have been bought up throughout this thread.
There's nothing wrong with debit cards being used.
If I can shout one thing back up to your rooftop:
Why on earth do your transactions cost 2 or 3 percent. For what? For basically verifying an RFID chip and adding a single entry to a ledger?
Don't say you're getting it back with points or whatever because we all know that the credit card company won't be going broke so that cut is coming from somewhere. And in the end that's always the consumer
Retailers(in the US) typically eat the cost. Some industries(in the US), like gun shops, are up front about charging more for credit card payments. Most companies(in the US) just see it as cost of doing business.
Points have next to nothing to do with why you should always use credit cards(in the US). There are legal consumer protection reasons. The points are just an optional perk.
This is what I really have a problem with. It feels so incomprehensible to me that, assuming you're an adult, you can think this.
It's just a cost, if that cost didn't exist then either the price would be lower or the margin would be higher. In the end you're paying for it. You're the one exchanging money for a good/service.
This is proven by your other comment about how some sectors give you the option. I would rather have that option because those legal protections are useless for the majority of purchases. Good luck disputing that burrito you bought or those groceries. In such transactions you're basically just inviting a company to take a cut for 0 added benefit (aside from points).
For whatever reason most do not, so it's advantageous to use the one with better legal protections. It's not only about purchase protection/disputes, but liability and timelines when/if someone steals your card info and makes a bunch of fraudulent charges. The more places you use a card, the higher the chance that info will get skimmed or stolen.
Luckily, while behind, most places in the US have moved to tap to pay which helps a lot with POS skimming. But it only takes one bad employee to photo or copy your card info, or one poorly configured webstore, to leak your information and use it for online purchases. My most recent credit card doesn't even have numbers or an expiration printed on it, for that reason.
You typically need a PIN for any decent purchase. Sure you can tap to pay but that wouldn't be a lot of money fast as it asks for a PIN above a certain amount. That problem of copying the card data is only because it's a credit card and that's all you need to make a purchase.
As to skimming, in Europe there was some active skimming going on in the early 2000s which is why I can't even recall seeing a terminal here that still issues the magnetic strip.
Every debit card I have in my wallet right now can be used anywhere a VISA is accepted using the same kind of number as a VISA card. I can go to any website that accepts VISA as payment, type in that same 16-digit number as any other kind of credit card, expiration, and CVV and essentially empty it out in a few minutes.
This has been true across many different banks. I have had ATM-only style cards issued in the past but I haven't encountered one of those in over 20 years.
I think it's possible to write the number to the strip of your cloned card with the bits set to say this is NOT a chip card, so that a terminal won't say "Use chip" -- but clearly the issuer could have the opportunity to notice it odd that the transaction is using the stripe and hopefully subject it to harsher fraud heuristics.
I think you're misunderstanding the protections we're talking about.
When someone steals my credit card and spends $10k on it, I just dispute it. The charges don't show up on my bill until after the investigation happens, and chances are it will be found in my favor. I continue having my cash in my bank account. Life continues with no changes.
When someone steals my debit card and spends all my cash, I dispute it. They begin their investigation. This means I'm without all my cash for days, maybe weeks, while they do their investigation. Now I can't pay rent. Now I can't buy groceries. My life is pretty messed up at this point.
I've seen it happen to several people personally. It happens all the time.
You gave them your PIN too? Yes, then you have something you explain.
Without it no one is spending anything beyond the tap to pay amount which would typically be low amount (double digits)
On top of that, I can use the card online using the same kind of credit card numbers. This does not require a PIN.
Still a cc company involved, so they'll take a cut without any of the advantages. Not even sure why that's a product
While there are still some interchange fees involved, its less than the overall fee with actual credit cards. Its often more like 0.5% + $0.21, the max allowable fee under the Durbin Amendment.
Simply not true. Every transaction with a card carries some risk of those cards details being leaked or even an innocent error being made by a cashier or clerk fat-fingering things. Some more than others, and you could maybe argue the risk is minimal - but it's there. Especially in the US where card transactions are less secure on average regardless of debit or credit.
Credit carries significantly more consumer protection in the US. Debit in theory has all sorts of legal protection, but as the other commenter states - in practice it's really spotty.
Even in your scenario of a burrito or grocery purchase credit is going to be much better. So long as you don't make a habit of chargebacks they are typically pretty automatic for most card issuers so long as you present a compelling case. If you're a "valued customer" you tend to get a few freebies before they start to really demand evidence of fraud for such things.
Just saying, your 'few freebies' is where you rip off a merchant. That's pretty much theft at that point
Other folks might have just as legitimate reasons to make a chargeback, but due to a low internal “customer value score” they will need to jump through a bunch of hoops a more “valuable” customer would not for the exact same situation.
I tend to agree chargebacks are taken advantage of far more than they should be - but my point is that the chargeback experience is going to vary drastically by demographic.
I was originally interested in Bitcoin 15 years ago because of the fraudulent chargeback problem. It’s interesting how times have slowly changed and chargebacks are starting to shift towards a benefit for the privileged due to the sheer amount of abuse from so many people. Basically we decided to tie them to a hidden credit score.
So, someone could open up a cash-only chain store and have lower costs that could allow them to price things a couple percent lower, but the absence of that business suggests that they know nobody wants to go to the trouble of paying cash anymore for a savings of a few bucks a month.
I expect that if credit card fees went to 0 tomorrow, no prices would change (though I'd lose thousands in value I get from points each year). Many retailers like grocery operate on thin margins already, so they'd be especially eager to keep the block of cheese at $2.69 instead of dropping it by a few cents.
And even if you could prove that eventually some retailer would give pass on that savings to customers, I still would rather use a card than deal with cash. And stores know that they sell more than they would if (1) everyone had to carry cash everywhere they go and also (2) if people couldn't spend on credit. That's what the retailers are spending 3% on.
Dead wrong. Its still a big problem in the US.
https://www.kansascityfed.org/research/payments-system-resea...
> In 2023, 21 percent of U.S. consumers experienced financial fraud: 17 percent of all consumers (or 18 percent of consumers who own credit cards) experienced credit card fraud, and 8 percent of all consumers experienced non-credit card fraud (with some consumers experiencing both types of fraud).
Sure, we've now moved to do tap to pay and chipped cards for a lot of transactions. However, this is useless for online orders which just requires knowledge of the magic numbers which all are helpfully printed on the face of the card you hand to people, tell over the phone, or type into websites.
We need to move towards actually secure online payment systems.
So add another layer of duopoly and middlemen to the way I pay for things. No thanks!
What happens when Google permabans me because I failed to pay a $0.50 cloud bill a few months ago and I got forever locked out of my iCloud account? Guess I can't buy anything online again ever.
Don't get me wrong I've used these for payment processing before, but I'd really prefer some kind of more standardized way of doing payments directly instead of adding yet another middleman. I already have a secure token device with me (the credit card), I should just be able to pay directly with it through the website.
But I would hate not to have the option of using my bank card by itself. When I travel, I always carry my wallet and a couple of card, because your phone can die, be stolen, you can be out of charge, etc...
Waiter presents me the machine, I insert my card or wave it over the NFC reader of the machine, if I insert the card, machine always ask for pin, if I use NFC, it will ask sometimes based on some obscure criteria.
For really expensive transactions, eventually, I may get a notification on my bank app in the phone, asking me if I am really, really doing this, I authenticate with biometrics and click ok.
it is not that hard.
Lots of restaurants and bars have been slow to adopt new systems. While many have moved towards waiters having portable machines and can process the payments table-side, probably half the restaurants and bars I go to expect the waiter/bartender to handle the card.
Few banks/merchants actually require a PIN for transactions most of the time. I couldn't even tell you what the PIN is on most of my credit cards, its never come up on a lot of them even with $1,000+ purchases.