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Comment by rosser | Hacker News Reader

By using a credit card you immediately have a debt whether you like it or not.

Credit cards are only debt if you treat them like debt. I use the shit out of mine, but pay the full balance pretty much every month. There's a lot of convenience, I'm fully protected from fraudulent activity, and I have a stupid amount of points/miles/whatever for free (or at least cheap) travel, to boot — I flew to .au a couple years ago for free on that basis, for example.

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Your balance is irrelevant - your available credit line is debt, as at any moment you can be liable for up to that amount.

If I have a $10,000 credit limit and $0 balance, my debt is $10,000? At any moment I can be liable for up to $10,000? How does that work?

How does that work?

It doesn't. The GP comment is FUD.

It is, however, an element of your credit score.

Credit utilization is another element though. It's bad if you have too big a line of credit, but good if you have a historically low ratio of (debt/available credit).

In that your credit score has a factor of actual debt to total credit. Someone with $1000 of debt on $100,000 in credit is much better off than someone with $1000 of debt on $5,000 of credit.

So things like car loans and mortgages could be bad, since they start at 100% and go down.

If you're uninsured in the US and break your leg, yes, your debt is now $10,000.

Or much higher, but this is unrelated to credit cards.

"A credit card would give me the ability to instantaneously take on $10,000 in debt. I don't want this." is a responsible and admirable position for someone to take.

Agreed, but once again irrelevant, as that's not what anybody in this thread of conversation has said.

...which is utterly irrelevant to credit cards.

Your available credit line is not debt, and I can't recall ever hearing of anyone being held accountable for fraudulent purchases made against their account. Does this happen?

In the US, you have zero liability for fraudulent charges made on your card without a valid signature, by law.

I wound up being held accountable for a small amount because I missed a deadline in the follow-up paperwork. So yes, it happens, but only when it doesn't matter much.

Credit card terms vary from country to country.

Here (Singapore) card conditions were recently changed so that you would only be liable for the first $100 of fraudulent transactions (assuming you can prove it wasn't you). I think the bank can still hold you liable for more if they find you were negligent about guarding your card details.

Prior to these condition changes, I remember being told by the bank that you would be liable for all charges incurred before you had reported the card physically stolen or lost.

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