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Comment by ThrustVectoring | Hacker News Reader

>I don’t own a credit card (by choice)

If you have the organizational skills and self-discipline to use a credit card the same way you'd use debit or cash, you're way better off using a credit card. If your debit card gets skimmed at a gas station, your bank account will be debited and you have a significant problem until it gets resolved. If your credit card gets skimmed, the issuer has a problem and you need merely to inform them and wait for a new card in the mail.

Plus, 2% cash back on all purchases is pretty nice.

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Yep, but the problem is my moral compass is potentially out of whack. I'm 100% confident I could control using the card, but fundamentally I don't like how credit card companies are ran. Plus I don't agree with a company keeping tabs on my financial transactions and then profiting from that data on my behalf.

With that said, the 2% is nice but it's not enough to make me reconsider. There probably is a number where I would give in, but since that's never going to happen, I don't bother thinking about it.

On the other hand, debit card theft is a real concern. I partly combat that by keeping the minimum in that account. Fortunately I haven't misplaced my card in the last ~20 years. I'm hoping my bank would resolve it. They did really well in a few cases where an online vendor didn't honor their own policies (they helped me recover the funds without it being a huge deal).

Have you considered rewards churning in an attempt to cause net losses for the issuer? IMO that's a better protest move than simply not participating, at least until something better can be coordinated.

You're still causing a ~3% loss to the vendor every time you spend money using a credit card.

The vendor has calculated the transaction cost into their prices. You're paying ~2% more than necessary if you pay with cash.

The vendor often isn't even getting that 2% anyhow - it's dead losses from cash-handling expenses and employee theft.

Not if I shop at cash only places.

Is it feasible to do this all the time? No. But quite often it is.

I personally believe most of the "cash only" places (or places that beg you to pay cash) only do so to get out of paying taxes. It's a lot easier to underreport your income if your whole business is cash.

Many businesses are cash-only because they had so much credit-card fraud associated with them that no merchant bank is willing to process their payments.

That doesn't refute the argument for having and using a credit card for places that do take credit cards, when you inevitably run across one of them.

Not everyone that uses a credit card is financially supporting the company.

Inevitably you support the company with virtually every transaction. The vendor will pay a fee for using Visa, for example. I believe it's a percentage of the purchase.

True, but everyone who uses a credit card without defaulting on it is.

You don't like how credit card companies like Visa, MasterCard or Amex are ran? How do you use a debit card without them?

Not having a debit card would make modern day living too much of a pain. I pay for almost everything in cash and really only use my debit card for paying recurring bills. Can't always win. :)

> Plus I don't agree with a company keeping tabs on my financial transactions and then profiting from that data on my behalf.

You'll have that near equally as long as you do non-cash transactions unless you use your debit card from an equally privacy conscious institution (maybe a small town credit union? Until they got bought at least..).

Personally I've just accepted that my boring life is known to everyone and try and get the perks I can out of it; free trip once a year being about what I've managed to extract without much effort.

That still does not address the "I don't agree with how they are ran"-concern.

There sadly is no US version of the Fair Finance Guide yet, but in the countries where it does exist it is a pretty good guideline for finding banks that align with your moral interests:

https://fairfinanceguide.org/

The Dutch one is the first version, and as a result also the most elaborate:

https://eerlijkegeldwijzer.nl/bankwijzer/themas/

Doesn't matter where the debit card is issued, the relevant data still goes over the same network(s), mostly managed by Bank of America Corp...

Credit Cards are often a way for us to get our money back because everything has been marked up 0.5-2% for credit card fees.

When you're paying with cash - you're giving a little bit more profit to the retailer.

This is also an issue for the under privileged who do not have access to meaningful credit to get cash back.

Not sure if that might change the perspective.

Are you suggesting that you use a credit card to combat credit card fees?

That feels like "not solving the problem"

Actually it feels like the prisoners dilemma: if everyone chooses what's best for themselves the we're worse off overall...

That ship sailed long ago, though, and nothing short of the collapse of our financial system will bring that ship back to dock. The only rational decision is to "defect" in this particular dilemma: cooperating just hurts you and doesn't change the overall outcome for anyone else.

Not suggesting a solution at all. Just was curious if the original poster was aware most thing we pay for in cash are inflated to include the retailer's credit card fees.

What might be interesteing is a till discount at each retailer for not using a credit card.

I preferred to use debit for a long time too. As fraud increases, I'd rather the bank be hit with fraud on a CC instead of my bank account. It's not the best insurance, but banks are far more motivated to get their own money back quickly over their customers'.

You're getting your money back and a bit of everyone else's who has to use cash. Visa is splitting the ill-gotten gains from its market power with you so that you'll help keep the system going. It's mildly unethical to use credit over debit. That 3% skim isn't from doing something socially positive, it's completely zero-sum.

Let's unpack what you're stating, I think you have misunderstood something:

Retailers often include their half of CC fees in the price you pay at the till, regardless of whether a cc is used. This is on top of any fees you may pay.

Since it's the retailer deciding to leave their CC fees in the retail price, I'm getting back my money on my purchase.

It's the retailer who's keeping the extra few percent on their prices, not visa, or you, when someone is paying cash.

The questions of ethics is interesting. While I appreciate the morality checks from strangers at any time, if the retailers are pocketing the extra %, instead of providing a cash/debit price, should disdain towards 'ill-gotten gains' be focused on each 'mildly unethical' retailer you are dealing with?

I don't see a significant enough difference between the negative bits of how credit card companies are run vs. how the rest of the banking and financial system is run, so I honestly don't understand the distinction you've drawn -- to your own financial detriment. I guess I do plenty of irrational things for emotional reasons too, though, so I can't fault you too much for it.

If your debit cards info gets stolen, they take YOUR money and the bank may not necessarily be in as much of a hurry to get it bank. In the mean time, you have no cash, maybe for days or weeks.

If your credit card info gets stolen, the thief had access to credit card company money, not yours, and you still have access to all your cash as long as you personally can refuse to pay for fradulent charges. It is the banking institutions money they have stolen access to, and the CC company has incentive to shut down the fraud ASAP.

It's not about the morality of supporting credit card companies or controlling spending impulses, it's about whose money the thieves have access to and wither or not you have the ability to pay rent 2 days after your card gets stolen.

I think you're replying to the wrong person here. I absolutely agree with you on this point, and at any rate wasn't at all talking about personal liability when using a debit/bank card vs. a credit card. I was in fact replying to a poster who doesn't use credit cards because they don't like how the CC system is run, which I thought was odd, since the banking system overall is rife with sketchy practices. In other words, if they don't like CCs, then they shouldn't like debit/bank cards either.

Debit cards offer buyer protection. It's not as comprehensive as a credit card but you can report fraud and get your money back. Granted the cash will be tied up for a few days until the refund posts but it's not lost.

Debit cards also have transaction limits and fraud detection designed to limit your exposure. It's not foolproof but it's a lot better than carrying large amounts of cash around in your pocket.

I went many years without a credit card out of moral principal but having to travel and rent cars finally made me break down and get one. It was so much less hassle to rent a car with one vs without one that I did it.

I hate credit cards.

> Debit cards offer buyer protection. It's not as comprehensive as a credit card but you can report fraud and get your money back. Granted the cash will be tied up for a few days until the refund posts but it's not lost.

Protections on your debit card are bank policy, protections on credit cards are federal law. So basically with a debit card your just hoping the bank is nice and will give your money back. With a credit card they have to give your money back.

> I went many years without a credit card out of moral principal but having to travel and rent cars finally made me break down and get one. It was so much less hassle to rent a car with one vs without one that I did it.

And what moral principle is that, that says credit cards are bad?

> I hate credit cards.

Good luck building credit without a credit card.

Exactly. Credit card protections are law and regulation.

Debit card offers then started to offer protections, in order to compete with this.

If you like these features, remember: They are the result of law and regulation. They were not created by the "free market". Although the marketplace helped promulgate them, once they were in place on credit cards -- as a "minimum standard", as it were.

> Debit card offers then started to offer protections, in order to compete with this.

Debit cards don't have the backing of law so they are not as safe as credit cards. Doesn't matter what "protections" your debit card has they can be arbitrarily revoked by your bank.

Yes.

> Granted the cash will be tied up for a few days until the refund posts but it's not lost.

You say this as sort of a throwaway comment, but this is actually a huge deal, and is why I only use my debit card for withdrawing cash at ATMs that I trust or at least pray aren't sketchy, and use credit cards or cash for everything else.

Having some arbitrary amount of money missing from my checking account for any amount of time (which can be several weeks if your bank is annoying) due to debit card fraud or even just an error during a legitimate charge is absolutely unacceptable to me.

There's also a wealth of other perks and protections in most Credit Card contracts. Did you know that your issuer likely gives you rental insurance when you rent a car? No need to buy the extra insurance! Check your terms for other hidden gems.

>Plus, 2% cash back on all purchases is pretty nice.

This rate of cashback seems to be a very America-centric concept. You're unlikely to get above 0.5% with a Visa Credit card in the EU.

Processing fees are also much lower in the EU, hence the lower rewards.

Unless the lower cash/debit price is worth it... in California on my last road trip, noticed the extra charge for CC wasn't worth it even at the 5% I was getting back at gas stations. It really depends. You also have to work to make certain you're paying off your card every month and don't overspend.

It's can be pretty great. Better still if you're getting reimbursed for expenses.

> If you have the organizational skills and self-discipline to use a credit card the same way you'd use debit or cash, you're way better off using a credit card

The problem is everyone thinks they are above-average.

If credit cards were really a great deal, they wouldn't make any money.

Credit cards would still make money off interchange fees. Cash handling is expensive for merchants, both in terms of wages and potential theft. Chase makes something like five billion dollars a year off of interchange fees. Interchange fees don't pay for the whole infrastructure and operations of a credit card company, but the marginal interchange fee does approximately pay for the marginal costs of adding a credit card customer (including rewards).

Yeah you are right, looking at the financials this is where most of their revenue comes from.

I have just seen too many people (incl.family members) fall deep into CC debt I'm probably biased.

I'm sure they make a killing on those carrying large balances Americans love debt. But you can personally come out ahead as a consumer if you pay your bill in full each month, and you can abuse it through churning if you really try. That's just allot of work.

Nah, Chase makes more money from charging credit card interest on balances than on interchange fees. It's something like 2-3 times as much as the interchange fees last time I checked. The interchange fees have very little consumer default risk and typically more than cover the marginal cost of issuing more credit cards.

Being scared of credit card interest is actually correct. It's just that it's a manageable risk through having the proper budgeting and financial habits. Take the fear, use it to make sure you could operate on a cash basis instead of credit if you had to, and then pay off every credit card statement on or before the due date.

Credit cards can also make money from the business which accepts them in which case they can choose to not make money from the credit card customer.

> The problem is everyone thinks they are above-average.

There is a very simple test for that... Do you pay your credit card bill completely pretty much every month?

If you use a paypal debit card that is linked to your bank account, it is almost like having a credit card in that you are not liable for anything. All frauds are dealt with by paypal, and from my experience, the customer care was really good and smooth.

Isn't the money still missing from your bank account and unavailable while the fraud is being resolved?

For me, I have phone notifications, so the moment I saw the fraudulent transaction on my phone, I called them, and the transaction never completed. The money never left.

Actually for most cases of fraud the merchant (often a small business owner) loses out not only on the payment but on any stolen gas at the station.

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