Comment by ramijames

I used to have this same mentality (no credit cards) when I was younger, until my debit card was stolen and someone took $1000. The bank basically shrugged their shoulders and said there was nothing they could do.

I always get my money back when this happens with a credit card purchase. I've also had to dispute things occasionally, and I almost always get refunded.

>pay mine off every month so financially the same as a debit card

actually it's better than a debit card, your purchases "float" for half a month on average you get to pay later. if you, as you should, maintain a regimen of always adding to your investment portfolio, this is a non negligible amount.

> In the US you have several legal safeguards that are not provided by debit cards. Fraud liability limitations, chargebacks, and so on.

These are available to Visa and Mastercard debit cards too.

But yeah, the UK has section 75 of the Consumer Credit Act.

This is arguably partly because the EU caps card interchange (at 0.3%, generally). So these reward schemes don’t exist, because there’s no money for them, so why would anyone use a credit card over a debit card or bank transfer unless they need the credit? Most people in the US presumably don’t start using credit cards thinking “I’ll get in debt, that’ll be great”; it’s the reward schemes.

Ex-European here. It is very common to overdraft your bank account in Europe. The overdraft interest fees are very similar to the credit cards here in the US. It is basically the same service but with a different execution.

Because it gives me 2.5% cash back, which is basically free money.

Yet many European countries have high household debt. Switzerland, Sweden, Netherlands, Denmark, some of the highest in the world. I guess it has to be mortgages, since it's true they are not that "big" on credit cards. Although Klarna is a Swedish company.

https://en.wikipedia.org/wiki/List_of_countries_by_household...

I'm American, and I don't use the extra cash flow (in fact, I make sure to keep more money in my checking account than I spend on the credit card, so I can always auto-pay my bill and therefore never pay any interest).

If I could get a debit card that gave me 2% cash back on all transactions, I'd use that instead!

Pay your credit card balance off every week, and it's an overly complicated debit card but you technically build up a score for future loans. Also maybe you get cash back on that?

Rational if you want a mortgage in the US at least.

Using a credit card isn't only about living on debt. Some people pay them off every month, and use them for the fraud protection and rewards.

While I hate that it's like this, you're leaving money on the table.

Currently you're keeping money in the bank accruing the bank interest to occasionally pay for stuff.

With a credit card you would get various bonuses/cashback/gameified returns by owing them money, and it costs you nothing as long as you pay them back once a month interest free.

If you however slip up/miss a payment it will cost you a lot.

Both cases suck, but the latter saves you money if you play that game.

That's from a EU perspective. From a US perspective you also require it from a credit score perspective, which EU thankfully hasn't adopted... yet.

Sorry, but I don't care what other people think. It's my money and I'm careful with it.

The entire credit card industry is set up to squeeze out as much profit from people as possible. They offer discounts as an incentive, but it is a huge trap that many, many people fall into. I'm not interested in risk. I'm interested in simplicity.

It's participating in the credit card industry that is foolish.

Debit cards charge as credit cards no problem. That said not having a credit card is tough on your credit history. You could just have one and pay the balance but then they still have all your data, it sucks

Using a credit card makes it way, way easier to rent a car or book a hotel room, or do other transactions that require a significant preauth.

If you present a debit card to one of those desks, they may encourage you to swap for a credit card. Because a debit preauth ties up actual funds in your account. A credit preauth costs nothing but part of your credit limit. It really is a difference if you expect to spend money on vacation.

I’ve literally never bought anything with a debit card. I’ve definitely spent over a million dollars on credit cards in the last 3 decades and maybe over 2 million if you include personal and business card transactions.

That’s why businesses eat the credit card fees.

Businesses accept less money when someone pays with BNPL. They also accept less money when someone pays with a credit card.

The reason is rather obvious, people spend more money with credit than they would’ve with cash. Accepting 95 cents on the dollar to get a sale with credit that you wouldn’t have got with cash still earns the seller money, money they wouldn’t have earned without accepting credit.

5% is a pretty high rate IMO. When I worked at retail 20 years ago we got around 2 or 3%, and that was a mom and pop shop, not big retail...

Vampire Squid. But this is only in one country. Go other places (e.g. New Zealand) and reality is different. There every single transaction has the credit card fee added explicitly.

The reason for a business to want to accept cards is that some fraction of your customers would choose not to buy whatever it is you sell if not for the convenience. Whether that's a guy who decides not to buy donuts because then he won't have even to buy more scratch-offs or the woman who doesn't get those bald tires replaced because if she did the family will be leaving on cheese sandwiches until payday.

For the consumer the reason is that this is revolving credit. If you pay next month you can have stuff today. That's a small relief, unless it turns into a carried balance and then it's an ongoing burden, but you don't think about that burden at first because you're naturally optimistic.