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Comment by tlogan | Hacker News Reader

I think the misunderstanding is that when I say “credit card,” I do not mean a physical card. I have not used a physical card in years. In the US, when people hear Mastercard or Visa, they usually associate that with a credit card (virtual or physical), meaning the money is not taken directly from your bank account. You pay the balance later, which gives you credit and strong dispute protections.

Debit or ATM cards are different. They pull money directly from your account and can exist independently of Visa and Mastercard. For example, some credit unions still issue ATM only debit cards that are not part of the Visa or Mastercard networks.

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> In the US, when people hear Mastercard or Visa, they usually associate that with a credit card (virtual or physical), meaning the money is not taken directly from your bank account. You pay the balance later, which gives you credit and strong dispute protections.

Europeans use these dispute protections much less, so Visa/Mastercard are mostly seen as expensive pass-throughs.

And I thing the misunderstanding here is that Europeans don't really use credit cards: we use the term "credit card" when we should use "debit card", but that's language for you. Literally, you have to go out of your way to get an actual credit card instead of the ubiquitous debit card everybody has.

And in Europe, when people hear Mastercard or Visa, they just associate the name with refused payments at points of sale depending on the luck they had with the merchant, or the foreign country, etc.

I do agree that in this case, picking MC/VISA is not really important. When I changed banks a few years ago, it so happened that I switched from a Visa to a Mastercard. Nothing changed save for the logo on the card.

I really cannot imagine a world without credit cards. How do you buy Christmas presents, everything in cash? I am half joking.

But that might be one reason why business ideas from the US do not always translate well to Europe, and vice versa.

Well, yes, we pay "cash" in the sense we pay direct debit. So literally the same as you, we tap the card. Except we don't have to keep track of the credit balance at the end of the month: money's taken directly from the account. The bank app shows you have enough? You're set.

As to how, in the financial term: we europeans don't really have the credit culture the US has. Having a credit is something very last resort, especially for "trivial" stuff (e.g. christmas shopping, to keep your example). Most europeans will have one or two credits tops: real estate loan, and sometimes car loan. Companies (mostly US) start offering payments spread over multiple months, but it does not really have a high penetration (at least in France), being in small useless debts is something we avoid like the plague.

And how do we have enough money in the bank? We just shop after payday, not after. Or, for most people, we keep a somewhat constant amount in the daily account. It's just another way of managing your own money.

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