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Comment by devilbunny

2 days ago

Credit cards are, oddly enough, one place in which the US has absolutely amazing consumer protection laws. Debit cards do not share these protections by law (though many banks offer some of them).

So, if you move to the US, getting a credit card, even if you never intend to carry a balance, is a wise idea.

- You cannot be held responsible for more than $50 of fraudulent charges

- You are not required to report a card missing within a short period of time to claim that charges are fraudulent

- Because your bank account is not directly linked to the credit card, fraudulent charges occur with the credit bank's money, not yours, so you do not have to fight to have them declared fraudulent before you can use money in your account

5 comments

devilbunny

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lxgr  2 days ago

That's largely a myth these days.

> Debit cards do not share these protections by law

No, debit cards are covered by Regulation E, which also caps liability for fraudulent transactions, requires your issuer to provide provisional credit until the dispute case has been resolved etc.

The only practical difference in terms of the minimum fraud protections afforded by law is that you're out your own money instead of the bank's until you get that provisional credit, which can be a problem if it causes other transactions (utility bills etc.) on your checking account to bounce.

Where the two really differ significantly is for non-fraud disputes (goods/services not as expected etc.): Reg Z has explicit protections there; Reg E doesn't really talk about these.

But practically, it also doesn't really, because...

> though many banks offer some of them).

No, both Visa and Mastercard require require issuers to extend zero liability protections going beyond these regulations, so it's effectively all banks. (Capital One might be able to relax their own rules now that they own Discover, but I highly doubt they'd risk the consumer backlash for questionable benefit, since they can also just make merchants pay for card-not-present lost/stolen/card credential theft fraud and cover card-present fraud like everybody else in the US.)

wolvoleo  2 days ago

Hmm point #2 is not really required here either. In the past I have been skimmed once and I was notified by the bank before I even noticed the transactions. They had noticed because several cards used at a specific public ATM had been skimmed and abused, they removed the transactions immediately and sent me a new card. Very proactive, I didn't have to do anything.

Point #3 doesn't really play here because the credit card is simply a loan in your name and you are liable for the full amount regardless. You could simply not pay the bill but then the insane interest builds up.

I will never move to the US though anyway. I won't even visit until the situation improves.

  • devilbunny  2 days ago

    #3 is a reason not to use a debit card but to use credit instead. If you pay your balance in full every month, on time, then there is no interest due at all. So even after you get your bill, if the card has been used fraudulently, it's not your problem and you can't be stuck with the bill.

    I was using the generic "you", not you specifically. Many people don't understand this about credit cards in the US. If an entire nation of people use something that nobody you know does, then either they are all idiots in a way that nobody you know is, or there is something that makes it uniquely valuable there. The consumer protection angle is the unique value proposition (and it covers quite a lot of things).

    • wolvoleo  2 days ago

      I don't think consumers are idiots but I do think the system is skewed towards unhealthy borrowing. These protections and cashbacks are nothing but an incentive to keep it the same. The exact same could be done with debit cards after all. The banks are making money off the late payments and customers are incentivised to buy things they can't really afford.

      Don't forget this system already collapsed in a big way in 2007 and it had massive global ramifications.