Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Debit cards are hidden financial infrastructure

bam.kalzumeus.com

Post reply on HN
Print view View original

151–160 of 398 posts

Re: Debit cards are hidden financial infrastructure

#151

Post by nunez »

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…

you can get email alerts on cc transactions

i have alerts sent to me for anything higher than a cent

Re: Debit cards are hidden financial infrastructure

#152

Post by polishninja »

ikr678 wrote: post #149
smabie wrote: post #80

Earlier quoted context omitted.

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 ha…

Australia put a cap on interchange fees in 2017 that caused a drop in card rewards. Merchants argued that the lower interchange costs would be passed on to consumers. However, it appears to only significantly affected the consumer rewards.

Re: Debit cards are hidden financial infrastructure

#153

Post by hn_throwaway_69 »

p2t2p wrote: post #48
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.

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.

Also Australian here. Use a credit card which is set to direct debit (auto pay) the full outstanding balance from a high interest savings account. Credit card is added to and only used through Google Pay.

* Never pay anything in the way of fees or interest, including international fees.

* Never have a positive balance sitting in a transaction account earning zero interest (or as Americans would say, checking account).

* Never worry about overdrawing my transaction account.

* Card authorisations don't deprive me of my own money (eg hotel security bond).

* Importantly, in the event of fraudulent use of the card, the bank wears the damage while an investigation is underway.

A debit card might tick the first item on this list, but not the rest.

Re: Debit cards are hidden financial infrastructure

#154

Post by adamnew123456 »

jltsiren wrote: post #37
toomuchtodo wrote: post #33

Earlier quoted context omitted.

It really depends where on the income and wealth ladder you are. Lower and middle income, cash is king. Upper income, you’re as invested as possible and you’re able to pay for expenses with a combination of credit/margin, investment income, and comp (salary and equity liquidation). You’re keeping as little cash on hand as possible because “cash is trash” and doesn’t keep up with inflation such that assets do.

Shouldn't that be the opposite? The less money you have, the more effort you should put to using it efficiently. Once you have enough money, it's worth keeping a tiny fraction of it as cash for convenience, because investing it won't change anything.

It has to do with how long you expect a given dollar to live.

Below a certain point a dollar doesn't persist very long since you're mostly living paycheck to paycheck. If you're spending most of what you earn, then what matters is that you can pay for all the essentials. It doesn't really matter what the price is in absolute terms if your paycheck keeps pace.

(It would be really weird to cash your paycheck, buy some ETFs with it, then sell them all back a week later to pay rent and buy groceries. You'd just get back what you put in.)

Higher up a given dollar lasts a lot longer. Even the dollars in a retirement fund will last for decades - imagine if you were wealthy enough that 95% of your assets were like that. At that point you have two choices:

- Either keep it under a mattress, and lose a few percent of most of your money each year

- Or put it somewhere more active, where you have enough growth to keep pace

Re: Debit cards are hidden financial infrastructure

#155

Post by leetcrew »

jltsiren wrote: post #37
toomuchtodo wrote: post #33

Earlier quoted context omitted.

It really depends where on the income and wealth ladder you are. Lower and middle income, cash is king. Upper income, you’re as invested as possible and you’re able to pay for expenses with a combination of credit/margin, investment income, and comp (salary and equity liquidation). You’re keeping as little cash on hand as possible because “cash is trash” and doesn’t keep up with inflation such that assets do.

Shouldn't that be the opposite? The less money you have, the more effort you should put to using it efficiently. Once you have enough money, it's worth keeping a tiny fraction of it as cash for convenience, because investing it won't change anything.

there's a reason why most finance advice lists "3-6 months expenses in cash" as priority one. being forced to sell assets during a market downturn hurts you a lot more than parking a couple extra thousand in an index fund helps you. when you're barely making ends meet, the smart move is minimizing variance. when you can comfortably cover your expenses, you prefer to accept more variance to maximize EV.

Re: Debit cards are hidden financial infrastructure

#156

Post by dustintrex »

morsch wrote: post #144
dustintrex wrote: post #64

Earlier quoted context omitted.

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.

Technically the regulation says that charging is allowed, it just has to be the same flat fee across the entire SEPA zone, whether it's domestic or international. Most banks found domestic fees unpalatable, so they just made everything free. In this, as many other things when it comes to e-payments, Germany seems to be a bit of an outlier.

Re: Debit cards are hidden financial infrastructure

#157

Post by 8ytecoder »

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.

It a uniquely American stupidity that somehow everyone just lives with. The concept of overdraft doesn’t even exist in normal consumer accounts anywhere else in the world. The first thing I do when I open an account here is to disable overdraft - but then you have to pay return cheque charges by whoever was trying to charge your account.

Re: Debit cards are hidden financial infrastructure

#158

Post by Nursie »

just-ok wrote: post #52
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.

One of the biggest wins from credit cards (imo, of course) is reward programs. Getting a 1-3% discount on purchases is pretty nice (plus, obviously, fraud protection, etc.). However, some issuers are using crypto to claw back at this perk; for example, the Coinbase debit card can give you 4% back.

I find it hilarious that Americans will tell you about the great discount/cashback they get, then in the next post crypto advocates will tell you that crypto currency can avoid the insane credit card fees.

It's almost like the two things are related, but few people seem to link them...

In Europe and Australia, caps have largely fixed the latter, at the expense of the former. Seems better all around.

Re: Debit cards are hidden financial infrastructure

#159

Post by vagrantJin »

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)

Free money?

Re: Debit cards are hidden financial infrastructure

#160

Post by refurb »

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.

Oh boy no. Canada has only a handful of banks, minimal competition (they make money hand over fist) and customers get bent over on a regular basis.
Post reply on HN