As a US-ian I feel exactly that way when using a debit card.
A credit card, if misused, can run up your balance and then you dispute, and don't pay anything until it's resolved. A debit card, if misused, can drain your account and leave you penniless until it's resolved.
I always find it funny that americans think the button to oppose a payement doesn't exists on my banking app because I have a debit card and not a credit card.
> the lag time between hitting the button and getting your money back can be weeks.
Nope, it's as soon as the bank is aware. In your rush to correct me, you failed to understand that there are simply better customers protection here which make a product such as a credit card mostly useless.
Pretty sure that debit chargebacks lead to an instant credit (by regulation).
I'm almost tempted to test it right now but I am pretty sure I did this once and it took under 1 day
Ok now I asked a chatbot for how this is regulated. The answer was wrong as expected but it happened to mention the applicable regulation which can be looked up at gesezte-im-internet.de
It's mostly about who possesses the money. With debit, the money is transferred. With credit, the money is scheduled for transfer, subject to my approval.
This has basically nothing to do with it. A bank deposit is a liability of the bank, and possession is not a useful lens here.
What matters are the legal and contractual rights and obligations you have against the card issuer. In the US, these are historically different for credit cards (Fed Regulation Z) and debit cards (Regulation E), but since it's now effectively the same two schemes running it all and imposing their additional liability protections (largely motivated by considerations of brand perception, which would suffer if the same logo sometimes confers weaker protections).
The main practical difference nowadays is that in the case of debit cards, you're out your own money for a few days, while with credit cards, the only thing that temporarily suffers is your open-to-buy/line of credit.
> The main practical difference nowadays is that in the case of debit cards, you're out your own money for a few days, while with credit cards, the only thing that temporarily suffers is your open-to-buy/line of credit
Right, and this is GGP's main point
The risk to a debit card user in the US is higher because the money you need to pay your rent or mortgage may temporarily disappear due to fraud, and may take longer to resolve than your deadline with your landlord. When using a credit card, that risk is not on you.
The risk isn't bank transfers to your bank for your mortgage. The risk is card skimmers at a gas station or whatever. The theft isn't when you pay your rent, the theft is something preventing you from paying your rent, due to some totally unrelated prior transaction.
I think the risk is higher in the US compared to Europe because Europe was way faster to roll out chip stuff, whereas in the US it's still somewhat common to have to use the mag stripe.
Ah, I see. This is about the prevailing consumer protections. In the US, debit is not treated with nearly as much privilege as the EU. While credit signals debt in the EU, debit signals poor financial situation in the US, since credit enjoys protections debit does not.
Visa isn't a party to your contract with your card issuing bank. Your bank is responsible for filing a dispute, representing it properly, and (according to applicable law and/or as a good business practice for somebody that wants to retain your business) potentially reimbursing you out of pocket if a given transaction has issuing bank fraud liability.
Sure, but the fees I pay for go to Visa for, among others, combatting fraud and credit card cloning. I filled up my bank’s paperwork, I don’t know the inner details of their relationship with Visa.
Yep, that's why I always used CC and pay in full(until it become much more logical to pay the minimum and accumulate interest that is lower than the inflation).
It's much better to be indebted when buying something simply because if something goes wrong its much easier to convince someone to take their thing back when you haven't paid yet than trying to convince someone to send your money back and accept a return.
I've never seen a CC with an APR below 20%, which inflation has never hit in the US. But the logic is sound as long as your income is tracking inflation.
In US, maybe. In Turkey before the general election in 2023 the rates were kept so ridiculously low that you could have taken cash out of your CC and put the money in the savings account in the same bank and make money out of the arbitrage. Everyone did it, having good credit meant license to print free money, IIRC it was %2-%3 per month tax free net profit on the credit you took on your CC limit.
The fraud detection of the card processors is effective and they will disable a debit card before that happens. I've always had the money returned automatically the few times I've had one compromised.
Same fraud systems monitor credit cards except in the American case you get at worst 1% cash back so 1% off the purchase price of everything and if something does happen, and regardless of protections fraud still occurs, it’s the bank’s money that is gone and not yours.
Separately the EU is a large collection of states and each one has its varying levels of participation and sophistication with payment processing. Apple and Google Pay are both widely used and that won’t change, and by and large there’s no good reason for Europeans to not accept American credit cards so they’ll continue to do so.
Anyone telling you differently either doesn’t have the slightest idea what they’re talking about or they’re just caught up in a pointless anti-American fervor. Even in countries such as France American Express is accepted in more places.
Accepting cards from US-controlled schemes is not an issue at all. The geopolitical issue is not having any alternative, and these US schemes being the only way to pay even in domestic transactions.
Almost nobody considered this a problem until a few years ago, but the relevant EU stakeholders got pretty rattled recently [1], and my prediction is that this particular bell can't be un-rung.
They are aware of it, but there is so much US dependency that its very difficult to reverse course let along unto what has been done. The EU's age verification app will only work on Google or Apple controlled phones. A lot of payments are done on phones. A lot of other things depend on phones too - my local bus company (in the UK) requires its mobile app for some types of tickets. I have had to use phone based ID verification already.
Well it doesn’t matter whether it’s un-rung. Europe can develop payments tech, folks visiting continue to operate like they normally do. The US is increasingly accepting payment mechanisms and cards from other providers too. Continued competition is good here all else being close to equal.
Each nation or economic block or alliance or whatever will have to decide which kinds of products and services they’ll want to protect or build in-house. While the EU lambasted the United States when it began taking measures to do what the EU is doing now, it’s encouraging to see the EU change course and start to protect its industries, though who knows how effective that will be. China is looming large over the EU, Germany in particular.
That's interesting argument. Here it is usual to have a daily limit on debit cards. You can not spend more money than that, so a thief can not drain your account. Also many banks give you multiple accounts (you can transfer between them instantly). The debit card is connected to only one of them, so if you keep part of your money on the other account, that couldn't be touched even if the card payment limit has technical issues.
Multiple accounts (both debit and credit) are normal in the US as well, but I have never heard of a debit account here that has a daily spending limit.
Sounds like the US and Euro systems work fine within their own borders. Solutions designed for one make less sense in the context of the other.
Cards and accounts often allow the owner to set those limits for e.g. withdrawals or transfers etc. There's often a separate limit for home country and abroad. They're there to limit damage that might be caused by user error or stolen cards or something like that. (Or just to provide peace of mind.)
It gets interesting when the two system interacts. Friends visiting the US told me that at the POS terminal they had to choose credit card despite paying with a Visa/Mastercard debit card issued by an European bank.
By the way, here banks even have daily bank / wire transfer limit that can be changed only by a personal visit to a branch, so even if your online banking credentials are stolen, the attacker can not empty your account.
> Friends visiting the US told me that at the POS terminal they had to choose credit card despite paying with a Visa/Mastercard debit card issued by an European bank.
The "credit" button in the US really means "use the Visa/Mastercard network and don't ask me for a PIN", as opposed to "feel free to ask me for my PIN and route the transaction over one of a dozen or so US domestic debit networks". The question doesn't even make sense for non-US debit cards.
And that doesn’t always work. For example, at a Chevron petrol station in California in the middle of nowhere we tried several European credit and debit cards, and nothing worked. At the end, the guy working there helped us with some prepaid option at the counter. He didn’t believe us until he tried himself that really none of our cards worked.
But the situation is way better than 5+ years ago. Back then, almost every second purchase of ours had some problem with our cards in the US. Now, we had like one or two in more than a week.
But of course, some car rental companies still pretend that they are generous that they allow debit cards. Not just in the US.
Wells Fargo for the longest time had a daily spending limit on its Check Cards and a daily withdrawal limit. If you had a Debit (not check card) your “spending limit” was your withdrawal limit.
If you tried to make a purchase above the spending limit it was a hassle. I am old tho.
Unfortunately, the reality is that rather than your card being directly misused by a "shady" company, it's more likely that most companies you transact with do not have perfect security and will suffer a data breach that may expose your payment information.
A credit card, if misused, can run up your balance and then you dispute, and don't pay anything until it's resolved. A debit card, if misused, can drain your account and leave you penniless until it's resolved.