Debit cards are hidden financial infrastructure • Hacker News Board

Re: Debit cards are hidden financial infrastructure

#141

Post by joecool1029 » Sat, Nov 13, 2021, 5:22 AM UTC

NikolaNovak wrote: post #118

AdamJacobMuller wrote: post #92

Earlier quoted context omitted.

The specifics of it are dependent on the bank, but it can be more insidious than even your example. Given a balance of $100 and 4 transactions of $20, $20, $20, $90 you can either be charged one, or three overdraft fees depending on the order in which your bank deducts those from your account. Basically, ordering from largest to smallest will cause the most number of overdraft fees.

I'm going to re learn the lyrics to Oh Canada and sing them joyously and thankfully... Our banking system gets a lot of ire but dear Gawd.

I seem to recall there being service levels at banks in Canada and maximum numbers of transactions per month until one gets hit with per-transaction fees. I was told explicitly when I opened my TD Canada Trust account there that it was imperative that I both keep money in the accounts and use them occasionally or dormancy fees would accrue (and if there was no money left, they'd then slam it with overdraft fees).

The benefit of US banking despite lax regulation was that there's a ton of different banks and credit unions to choose from. Some are great and some are shit. Literally hundreds to pick from. Canada there was like 5 big banks, a large credit union, and then depending on your area there was maybe perhaps a small community credit union.

Re: Debit cards are hidden financial infrastructure

#142

Post by oneplane » Sat, Nov 13, 2021, 5:22 AM UTC

reaperducer wrote: post #39

wetpaws wrote: post #22

Earlier quoted context omitted.

Why in the world wouldn't you want to do it.

Sounds like you've never had a car break down. Or a relative get hurt on the other side of the country. Or been seriously ill. Or unemployed. Or had a major appliance break. Or a million other things that happen to people every single day.

Pretty much all of that is handled by the social safety that the government is there for or by your own savings that you build up because you are an adult and look ahead to make sure you can deal with such events. One of those things is planning and specifically financial planning.

Re: Debit cards are hidden financial infrastructure

#143

Post by oneplane » Sat, Nov 13, 2021, 5:23 AM UTC

chrisseaton wrote: post #54

reaperducer wrote: post #38

Earlier quoted context omitted.

Are there American banks that don't cover debit transactions with the same guarantees as credit card transactions? I've had two debit cards from two different large banks skimmed in the last five years, and both times the banks took care of it instantly. I think the whole "no coverage if you use debit" notion is many years out of date.

With a debit card you’re relying on the bank’s good will. With a credit card it’s the law. Also with credit you can dispute it before you pay it. With debit you’re trying to fix it up after your paid it.

It's almost as if the law is setup to let people make bad choices with money they don't actually have so that some value can be extracted from them later.

Re: Debit cards are hidden financial infrastructure

#144

Post by morsch » Sat, Nov 13, 2021, 5:23 AM UTC

dustintrex wrote: post #64

kccqzy wrote: post #59

> Typically, the apps offer their users a choice: payouts at the speed of banking, for free, or payouts at the speed of the Internet, for a small convenience fee. Cash App charges 1.5% with a minimum of a quarter. This is just another way the financial system (including fintech startups) preys on the poor. If you are well off, you wouldn't want to pay any convenience fee for the privilege of receiving money from a bu…

It's also another illustration of how backwards US payments infra is. In the EU, SEPA instant payments are just that: by law it can take a maximum of 10 seconds for the recipient to get paid, including across countries. And, of course, they're free. https://en.wikipedia.org/wiki/Single_Euro_Payments_Area

Maybe they're free where you are, but apparently in Germany banks, if they support it at all, charge 0.5 EUR on average. I've never used it.

Re: Debit cards are hidden financial infrastructure

#145

Post by markdown » Sat, Nov 13, 2021, 5:24 AM UTC

tcgv wrote: post #130

hahajk wrote: post #96

Earlier quoted context omitted.

Amex pays me over a thousand dollars a year to use my credit card (which it takes from the merchants as fees.) I kinda feel bad about that, but I know those fees are built into the price and if I used cash or debit I’d still be paying the same price, just not get the reward. But if they accepted lightning payments, I would pay them in BTC.

I used to ask "can you give me a discount if I pay in cash?" and most of the times the merchant would say no. Then I stopped asking and started using only credit cards for at least earning some "rewards" back. ("rewards" purposely in quotes since it's not really a reward, but amex/visa/mastercard want us to think it is - there's no free lunch)

In my country you pay extra (2.5%) at the checkout counter for using a credit card.

Re: Debit cards are hidden financial infrastructure

#146

Post by zippergz » Sat, Nov 13, 2021, 5:25 AM UTC

cloudbonsai wrote: post #104

aynyc wrote: post #4

Use credit card, it’s the card issuers that are on the hook for fraud. It’ll help you build credit. Use debit when you don’t have the means or credit history.

To be fair, debit card offers a few advantages over credit card: * Debit card allows to set granular spending limit (e.g. $100 per day). So you can protect the potential amount that a fraudster can spend with your card. * You can set it up to send transaction details via email on every purchase. This is a lot more convenient than, say, checking the credit card statement at the end of every month. I actually prefer us…

My credit cards (multiple issuers) all send me emails for every transaction.

Re: Debit cards are hidden financial infrastructure

#147

Post by oneplane » Sat, Nov 13, 2021, 5:25 AM UTC

TingPing wrote: post #20

metalliqaz wrote: post #14

Earlier quoted context omitted.

yes, if you don't have a bank account. if you are not living paycheck to paycheck, you can keep the minimum balance in a checking account and then arrange have your paycheck automatically deposited every payday with Direct Deposit. This is free. Check cashing places give you cash for paper checks. They charge a fee for the service.

Just to clarify, many banks have no minimum balance and charge no fee to cash any check. However some may have a harder time opening accounts than others.

Wouldn't that be a good item for a government at some level to look in to? Life without a working bank account would seem unreasonably hard to me.

Re: Debit cards are hidden financial infrastructure

#148

Post by markdown » Sat, Nov 13, 2021, 5:26 AM UTC

smabie wrote: post #80

p2t2p wrote: post #48

Earlier quoted context omitted.

Australian here. Don’t use credit card, setup a separate account for bills, direct debit everything from there, don’t keep anything big on your debit card and use it with Apple Pay everywhere. No fraud, no fees, no complex things and rules to remember.

Why would you ever not want to put something on a cc? It's quite literally free money (rewards/points + you can delay payments for a month and pay no interest)

In my country, merchants add a 2.5% fee to every credit card transaction. Cash is king.

Re: Debit cards are hidden financial infrastructure

#149

Post by ikr678 » Sat, Nov 13, 2021, 5:27 AM UTC

smabie wrote: post #80

p2t2p wrote: post #48

Earlier quoted context omitted.

Australian here. Don’t use credit card, setup a separate account for bills, direct debit everything from there, don’t keep anything big on your debit card and use it with Apple Pay everywhere. No fraud, no fees, no complex things and rules to remember.

Why would you ever not want to put something on a cc? It's quite literally free money (rewards/points + you can delay payments for a month and pay no interest)

Australian here - Points systems are only really worth it in Aus if you're collecting frequent flyer related ones. There are not as many cash-back rewards as the US. We have had a universal fee free bill payment system called Bpay for 20+ years, and paying via cc usually incurs a minor fee. So most households will direct Bpay household bills rather than via credit card.

I don't fly much, so I dont feel the need to harvest points. I dont want my purchasing data picked up by any more companies than necessary (my bank & the vendor), and all the various chargeback and refund facilities offered by credit card companies are a bit less critical as Australia already has stronger consumer protection law around goods fit for purpose & refunds. Credit scores are not really a thing in Australia either, you are assessed on your current ability to service a loan rather your history. Defaults still show up & count against you, but 'building good credit' is again an American concept.

Credit cards are a product designed largely for the American market.

Re: Debit cards are hidden financial infrastructure

#150

Post by wmf » Sat, Nov 13, 2021, 5:38 AM UTC

oneplane wrote: post #147

TingPing wrote: post #20

Earlier quoted context omitted.

Just to clarify, many banks have no minimum balance and charge no fee to cash any check. However some may have a harder time opening accounts than others.

Wouldn't that be a good item for a government at some level to look in to? Life without a working bank account would seem unreasonably hard to me.

The US government looks at this occasionally but banking lobbyists keep convincing them not to do much. https://www.fastcompany.com/90683033/the-post-office-is-fina...