I Hate Using Credit Cards
Quote:
Originally Posted by
Carl_Mega
Without getting too detailed, there are vulnerabilities along the entire transaction & issuing chain. Skimming. Carelessness. Sniffing. At some point, data needs to move - be it from your physical card all the way to the card issuer who is authorizing the transaction. Even in End to End encryption - there are edges of vulnerability. Smart crafty people are looking for opportunities to exploit.
That said, I personally use credit cards without a care in the world. To be blunt, the card holder ain't on the hook for diddly squat. Credit transactions offer the most protections. I know some people here mentioned debit and ach but, imho, that's a bit different: you need to convince a bank to return funds into your account after they've been removed vs. contesting a fraudulent charge that you've never fronted $ for. They are governed and regulated differently in terms of consumer protection.
Not all merchants and utilities are PCI compliant. Shocker, I know, but certain parts of the industry are pretty lax and some merchants do retain card info on their systems. That remains the primary vector for card compromises.
In any event, I don’t spend too much time worrying about fraud either for the same reason. Keep in mind that you’re only not liable for fraud you catch and there is a liability window wherein ongoing fraud eventually shifts back to the cardholder, so keep an eye on your statements.
Small quibble re: debit card transactions processed on a signature network: the rules are exactly the same. How you cash flow can be an issue (and one of your own making, IMO), but to the issuing bank it makes absolutely no difference whether fraud happens with a debit card or a credit card. They’re usually on the hook for it and crediting your account comes directly out of their bottom line, debit or credit. Bigger issuers can be better at handling it because they’ve been there, done that and they’re a bigger target for the CFPB and others, but that doesn’t mean smaller issuers can’t also take good care of you. The rules are the same, they’ll just take it a little more personally if the $300 comes out of their net income. Which... I don’t think this has been said, this liability profile is what interchange income is FOR. Take away the incentive and assuming the liability no longer makes sense.
ACH rules are quite a bit different (though regulations are in many cases identical), but if anything is going to be easier because the liability profile is different and your bank isn’t on the hook for it (if it’s identified timely). They have no reason not to take care of it right away.
I Hate Using Credit Cards
Quote:
Originally Posted by
altasnob
The fee amount is based on the purchase amount and the credit rating of the purchaser (because each credit card transaction is actually a mini loan). Most of the cheapest merchant services also have a base monthly fee that retailers must pay. So even if everyone pays cash to try to help the retailer out, the retailer is still having to pay that monthly fee regardless of whether they make one credit card sale a month, or 1000. So paying cash does not help them out as much as you may think (unless they get rid of credit card payment completely).
Just a long winded way of saying I wish we had more regulation and fee caps of this industry like the EU.
The network doesn’t know the purchaser’s credit score. AmEx and Discover (who are both the issuer and the network) might, but...that’s not a thing. The card type (which could be partially determined on credit score, depending on the issuer, albeit indirectly) does have an impact on your fees, though.
I get that you’re butthurt as a merchant who has to pay fees that feel like a shakedown, but you’re a little off base in your ranting.
Quote:
Originally Posted by
altasnob
Here's another way credit card companies rip us off. For my Costco cashback visa, once a year I get a check that I can only redeem at Costco. They encourage you to use that check to pay for Costco purchases rather than get cashback. But if you use the voucher for Costco goods, you don't get the 1% cashback on that amount. It is smarter for the consumer to always pay using the credit card (so you get the 1%) and get the reward as cash. You have to go talk to customer service to get the amount in cash. 1% on a $300 voucher is pretty trivial, but it all adds up.
My REI VISA card does the same thing. They give you the voucher on month 1 that you can only use on REI purchases (but lose out on the 15% reward I get with the REI card). You have to wait a few months to covert the voucher to cash, and REI Visa knows most won't do this. My City double cash also plays this game. Rather than take cash they try to get me to use my reward on physical items (that I won't get the 2% reward if I go this route).
Rewards are pretty cynical, generally. Most systems are predicated on a redemption rate of only 30 to 45%. It means the rewards can be richer for those who engage and pay attention and increases profit margins for the issuing bank, which... that’s not a super high margin industry. They’ll fund their operation one way or the other.
This was readily apparent when debit card interchange rates were capped a decade or so ago. You still have to pay for the system, and other fees were increased almost immediately to compensate. Nobody “lost.” Such a weird way to look at it.... Do you really want it to be cheaper? Shift fraud liability back to the merchant.
I don’t understand why you key in on not earning rewards on your rewards, but that’s pretty standard and you’d be silly to design the system differently. You’re so mad at the game that you’re playing, one wonders why you play it....
Quote:
Originally Posted by
XXX-er
back in the day a GF's teenage kid wrote the PIN on the back of the card, her friends dirtbag brother (known to police ) cleaned her out, was caught on camera at a gasbar ATM & she got the money back, sounds like a pretty dumb kid but she recently completed med school and is now making 250K a year, not sure if you want that girl working on you in the emerg
No rule says you can’t write your PIN on the back of your card. You still aren’t liable if it’s stolen as long as you report it timely, outside of that first $50 if the issuer wants to stick it to you. Which...they should, if you do that kind of thing.
I Hate Using Credit Cards
Quote:
Originally Posted by
Carl_Mega
That said, I think you are wrong on the Credit vs. Debit protections (tho admittedly this is not what I do):
https://www.experian.com/blogs/ask-e...n-debit-cards/
"The law governing
debit cards, though, is not quite so powerful. If a person used your debit card without your knowledge or authorization, your liability is protected by the
Electronic Funds Transfer Act, which gives you the right to challenge fraudulent transactions. But you'd better act fast. As long as you alert the bank that your card was stolen or compromised before someone uses it, you won't be liable for any of the future transactions. Wait two business days after the fraud and you might have to pay up to $50. Miss that deadline and wait 60 days, and your liability increases to $500. Let 60 days pass and your liability is unlimited, which means all your money in the account that was taken might be lost for good."
Merchant facing PCI compliance isn’t what I do. But fraud/disputes is in my area....
First, if you process your transaction over the VISA or MasterCard rails your fraud protection is governed by VISA and MC rules, which offer more protections than either (extremely consumer friendly) regulation and applies pretty equally to debit or credit transactions (some small equivocation because purchase protection and other insurance-ey protections ARE different, but are so far out in the margins that it rarely comes up).
Second, if you process your transaction over PIN network rails then your fraud protection is indeed governed by Reg E, which is different and confusing and you should just sign for your purchases, OK? That said:
1. If your FI makes you pay the $50 they’re assholes.
2. The clock starts ticking when you learn of the fraud, not when the fraud occurs.
3. The 60 day window is so widely misunderstood by the industry as to be farcical. There are a couple timelines in play. The first covers provisional credit and the FI’s obligation to conduct a speedy investigation as long as notification happens within 60 days of learning of the fraud. The second covers ultimate liability.
4. Liability falls within a 60 day window, but doesn’t mean what most people (including your experian blogger and many financial institutions) think it means. Essentially, you are protected with a 60 day fraud window. If a large fraudulent transaction happened last year, and you just learned of it now, you are liable for: (1) up to $50 if you notified within 2 days of learning about it, and up to $500 if you notified your FI after that 2 days and (2) any fraudulent transactions that happen 60 days after the first fraudulent transaction.
Really, they should have made one of the timelines 65 days or something just so people could learn to keep them straight.
I Hate Using Credit Cards
Quote:
Originally Posted by
Carl_Mega
Edit: you've really got me into a rabbit hole trying to see if Signature Debit (debit processed like credit for you mags) actually has different gov't protections or if the issuers/processors are just managing fraud and disputes similar - vs. those on Pin Debit. My googling is still showing the protections are treated as debit so if you have something that details the government consumer protections that'd help me.
This is governed by network rules and policy. Government consumer protections are, indeed, different. For most consumers in most situations, the difference should be negligible if discernible at all.
ETA: Right, if you process the transaction over VISA or MC then you’re covered by their network rules. Not quite the rule of law, but doesn’t make much difference at a cardholder level (and in practice is superior, IMO. Read notes above about industry misunderstandings about Reg E as exhibit A). Note that some PIN networks have similar protections in place. Good luck reading the fine print to figure it all out, though (I never bothered), or figuring out which PIN network your transaction was or better yet, will be, processed over.
EETA: Reg E is always an ultimate fallback for electronic transactions, period, regardless of card type (generally). Timelines and dispute rules may differ when you’re relying on VISA or MC network rules. It gets so far into the weeds that most will simply set policy around it that manages to regulation AND network rules so they don’t have to descend into the rabbit hole every time it comes up.