Debit & Credit Card Discussion

[barnabas1969]

Want to give her an aneurism? Buy something worth $11.54, then give her a twenty, two singles, and four pennies and stand there waiting for her to make change. You'll shut the whole store down for a week.

I don't often pay with cash. Debit cards are much more convenient. But I understand your frustration. On the rare occasion when I'm paying with cash, and realize after I've given her a 20 that I have some change that I want to give her so that I don't get back so many coins or whatever... I always end up trying to explain to her how to figure the change. It seems that I always wind up having her lay the change that the register said to give me on the counter. Then, I place my extra change next to the money she laid down. Then, I tell her to add it all up, and give me back bills instead of coins. I shouldn't have to go to such lengths, but it works.

[Moderator note: topic split from--> http://www.thegreenbutton.tv/forums/vie ... 466#p75466]

[makryger]

I don't think that making use of more convenient technologies and keeping track of spending are mutually exclusive. You can be responsible and make sure there aren't any erroneous payments on your statement, and still make use of automatic payments and credit cards.

[barnabas1969]

I don't think that making use of more convenient technologies and keeping track of spending are mutually exclusive. You can be responsible and make sure there aren't any erroneous payments on your statement, and still make use of automatic payments and credit cards.

I agree. Quicken is a great tool for tracking your expenses and automatically balancing your accounts.

[adam1991]

I don't often pay with cash. Debit cards are much more convenient.

yikes. Debit cards are incredibly dangerous.

Credit cards or bust. I had to custom order an ATM card from my bank, because by default they hand out debit cards. <shiver>

[adam1991]

I don't think that making use of more convenient technologies and keeping track of spending are mutually exclusive. You can be responsible and make sure there aren't any erroneous payments on your statement, and still make use of automatic payments and credit cards.

Automatic payment = your money is gone.

Once your money is gone, and if it's money they should not have taken in the first place, now you must jump through hoops to get YOUR money back. And good luck with that.

Possession is king. If they have it, they have active barriers in place to prevent your getting it back.

[barnabas1969]

Debit cards are not any more dangerous than a credit card. Every bank I know of will immediately refund your money if you report a fraudulent transaction. I work in banking... we do core transaction processing, payment processing, credit/debit/ATM transaction processing, plastic card production, etc, etc, etc.

In all the years that I've been using credit/debit cards, I have had exactly one fraudulent transaction hit my account. I called the bank, they refunded my money that instant, and deactivated my card. That same day on my lunch break, I drove to the nearest branch and they gave me an instant-issue debit card right on the spot.

Regarding automatic payments... there are several ways to handle that:
1) Electronic bill payment using your bank's website (more than 90% of electronic bill payments from your bank's website go through my employer's system... we are the largest payment processor in the world).
2) Giving the payee permission to automatically debit your credit/debit card every month.
3) Giving the payee permission to automatically debit your checking/savings account every month.

Option #1 gives you full control over when the payment gets made. You can stop it at any time, up until the date that it is processed and sent to the payee. The "processed" date is typically 2-5 days before the "pay-on" date.

Option #2 doesn't give you any control, except by calling your bank and deactivating your credit/debit card. I don't recommend doing it this way if you can avoid it. You can ask the payee to stop debiting your card, but this is prone to errors on the part of the payee.

Option #3 gives you even less control than option 2. To stop a payment, you have to ask the payee to stop sending the debits. If they don't stop, you can ask your bank to put a stop-payment on those transactions... but most banks charge a fee for this service, and it is not 100% guaranteed that they will stop the debit. The only way to 100% stop these debits is to close your checking/savings account.


So... if you use option #1, you can setup an automatic schedule (set it and forget it), and you can also stop that schedule at any time you desire.

[adam1991]

My bank lets you cancel online payments right up to midnight or so the day the payment is to be made.

My bank--let's call it Bank A--also pays on the day you schedule. Period.

One time many years ago, for a couple of reasons, I decided to switch banks. I went to Bank B, put money in, went to pay my bills...only to discover after the fact that Bank B played the float game. The day you scheduled was actually the day the money came out of your account and was no longer available to you. Actual payment of the bill--even to the big guys doing things entirely electronically--was 7 days later.

My credit card company understood and refunded my late fees. I was furious. I immediately dumped the idea of moving to Bank B. I had been spoiled by Bank A. Fortunately, I had not removed myself completely from Bank A, nor had any direct deposits been scheduled yet. I took everything out of Bank B and never looked back. (Someone recently told me that Bank B "doesn't do that anymore". Well, they used to do it, so screw them.)

I'm still with Bank A. Here's an interesting note: they have always cleared payments every day from smallest to largest. Long before the Wells Fargos of the world decided to screw Joe Sixpack by clearing the biggest payment first and letting multiple small payments all bounce, resulting in multiple bullcrap fees, my bank was clearing the little ones first to minimize the fee thing.

Anyway, there's no way I will give anyone access to my bank account. Period. No amount of promises from the banking industry will change that. I remember years ago a friend of mine had automatic payments taken out for an insurance policy. He cancelled the policy, but it was like moving heaven and earth to get them to stop taking money from him every month. You can't tell me big business/big banking are not still doing that crap. "Oh, we're sorry" doesn't work. There are no mistakes in big business like that--only deliberate moves designed to maximize revenue from stupid people who are too lazy to reconcile their transactions and pick up the phone as needed.

And even then, for those who do the right thing, all big business/big banking has to do is sit there and do nothing. As long as they have your money, what are you going to do? Realistically, most people just give up. Screw that, and screw big business/big banking.

[makryger]

I don't think that making use of more convenient technologies and keeping track of spending are mutually exclusive. You can be responsible and make sure there aren't any erroneous payments on your statement, and still make use of automatic payments and credit cards.

Automatic payment = your money is gone.

Once your money is gone, and if it's money they should not have taken in the first place, now you must jump through hoops to get YOUR money back. And good luck with that.

Possession is king. If they have it, they have active barriers in place to prevent your getting it back.

Yes, but you can still monitor individual payments usually the day that the payment is made, in your credit card bank account. You don't have to wait until the automatic payment to log into the website.

And as barnabas says, the credit cards are usually VERY generous about refunding charges that shouldn't be there. For example, I once booked a rental car where they didn't report an airport surcharge, and just added it on when I returned the car. I called the rental company and fought them tooth and nail to get that $40 back. They said there was nothing they could or would do because it wasn't there tax and it was an airport tax. I explained to them its still their responsibility to tell me what I'm paying, but they said, well, they already have my money, so there's nothing they would do. So I called up my bank, emailed them evidence of the original email estimate of costs, and Chase snagged the money back from the rental company in an instant.

Like everything in life, there is a balance, and it depends on where your responsibilities lie. If you feel like you're more likely to overspend your limit, resulting in overage fees, then maybe not having automatic payments is right for you. If you are someone that would rather not have to deal with the potential fees from not paying your bill on time, then maybe automatic payments are better. (In my personal case, I pay my credit card bills manually, as I need to make sure I don't go under the minimum checking account balance, but I pay things like my car bill and insurance bill automatically, as those don't really change.)

[barnabas1969]

I'm somewhere in the middle. I like to have control, so I pay most bills using electronic bill payment. The ones that don't change every month (rent/mortgage, car payment, etc) are scheduled to pay automatically every month. The ones that change every month (utility bills), I pay them manually using electronic bill pay.

I have Netflix and a magazine subscription setup to auto-pay using PayPal, because they only had options of using a credit/debit card or PayPal... and PayPal gives me three advantages. 1) I get an e-mail when every payment is made, 2) I don't need to change my payment method every time my bank reissues my card due to yet another merchant whose database has been hacked, and 3) I can login to PayPal and cancel the payment arrangement at any time without even contacting the merchant.

I have my car insurance setup to automatically debit my checking account. It's the only bill that I allow to automatically debit my bank account. I agree with Adam that merchants make far too many "mistakes" when you close your account, so I was a little hesitant to go this route. But, they offered me a significant discount if I went with direct debit, and I've been with the same car insurance company for 17 years. I don't plan to change car insurance carriers any time soon, and it's one of those things that I must pay on-time or else face consequences from the state of Florida... so it's not like I have a choice to delay payment if I needed to float a little money for a while.

By the way, since I've worked in Information Technology with financial institutions and financial software/service providers for more than 22 years, I've seen a LOT of what happens behind the scenes when a company "accidentally" sends an ACH debit (ACH = Automated Clearing House) after a customer has asked them to stop. Trust me, it happens FAR TOO OFTEN to be a real mistake... either that, or those companies (known as an "originator") have some really stupid and/or poorly-trained employees who have no idea how to stop the debits from being sent ("originated"). It is absolutely not the fault of your bank when this happens.

My checking/savings is at Bank of America. As Adam wrote about "Bank A", Bank of America pays your electronic bill payments in such a way that they guarantee that the payee will receive the payment no later than the "pay on" date. They also don't take the money out of your account until that date. Some banks choose to only give you the option to set the "process" date, and they take the money out of your account on that date. Those banks don't guarantee a delivery date, but they tell you that you should schedule the "process date" at least 5 business days before the payment is due.

My account started at Barnett Bank (it was the largest bank in Florida) back in the early 1990's. Barnett's bill-pay worked like BofA's does today... I could set the "pay-on" date, and they didn't take my money until that date. When Nations Bank bought Barnett (after Federal law was changed to allow interstate banking, which I believe was a HUGE mistake), my account was merged with Nations Bank. Nations used the "process date" method. I hated it. When Nations Bank bought Bank of America, they decided to keep the BofA name because it had better international recognition. Soon after that, they went back to "pay-on date" processing, which is much better.

Interestingly, in reference to Adam's mention of sorting from largest-to-smallest transaction amount, Barnett Bank was doing that for a while... until they lost a class action lawsuit about it. When Nations Bank bought them, they went back to sorting from largest-to-smallest. I was shocked! Bank of America recently lost (you guessed it) a class action lawsuit about their sorting practices... and now they pay items in the order received... which is the way it should be. It would be nice if they sorted from smallest-to-largest, because that provides the lowest fees to their customers... but posting in the order received is fair.

In my division of my employer, our software has three options for posting order. It can post in the order received, smallest-to-largest, or largest-to-smallest. FYI: Nearly all credit unions choose smallest-to-largest, because that provides the most benefit to their member/owners. If the customer doesn't specify a preference, I always choose smallest-to-largest.

In regard to the whole credit/debit card safety thing... there have been a lot of data breaches reported in the last few years, some of them very large (like Target). At my employer, we are VERY security conscious. It has amazed me how so many merchants and/or their Point of Sale (POS) processors have such terrible security measures in place.

Thankfully (for the consumer anyway), in response to those huge breaches, Visa and Mastercard have come together to form a set of standards called Payment Card Industry Data Security Standards (PCI-DSS, or just PCI for short). PCI has been in the implementation stage for several years. Eventually, processors (like my employer, AND those POS/merchant processors) will not be allowed to accept Visa/Mastercard unless they have demonstrated compliance with PCI. The PCI standards are extremely complex with multiple layers of encryption and other measures to ensure data security.

Oddly, even though core processors like my employer have not been breached, they decided that we must implement PCI first. We have spent a tremendous amount of time and money to comply with the PCI standards. In fact, we have PCI auditors in our building this week.

The next phase of PCI will require merchants and their POS processors to comply with PCI, or the will not be allowed to accept Visa/Mastercard. Once that is complete, I think these data breaches will become a thing of the past.

[adam1991]

And as barnabas says, the credit cards are usually VERY generous about refunding charges that shouldn't be there.

Credit cards, absolutely. They contain protections under the law.

But Barnabas was talking about debit cards, and they do NOT contain the same protections under the law. There's a reason Visa and Mastercard went down the "use your ATM card like a credit card" route--it was specifically to get around those laws that protect the consumer, laws that interfere with the profits of the credit card companies.

To ignore that reality simply because you've never been burned is silly. Why use a debit card at all when a credit card with stronger protections is available?

[adam1991]

And by the way, I find it FASCINATING that JUST YESTERDAY Mastercard came out with a press release:

http://finance.yahoo.com/news/mastercar ... 33106.html

MasterCard Inc, the world's second-largest debit and credit card company, said it was extending its zero-liability policy for cardholders in the United States to include all PIN-based and ATM transactions.

The move follows several data breaches at U.S. companies including one at Target Corp late last year involving the theft of about 40 million credit and debit card records.

"The move by MasterCard just enhances the sense of security for people at a time when it has been shaken up significantly in recent times", said Gil Luria, an analyst with Wedbush Securities Inc.

Zero-liability protection currently covers card transactions that require a customer's signature but does not apply if an account holder's personal identification number (PIN) was used for unauthorized transactions. The new policy will take effect in October.

Zero-liability protection means the account holder will not be held responsible for unauthorized transactions.

So they're extending their POLICY to PIN-based transactions, in addition to the signature-based transactions that their POLICY currently covers.

POLICY. Company POLICY.

Why depend on a company's "policy" on how they do things when you can instead depend on them behaving according to very strongly written and VERY established federal laws? Debit cards are covered by "policy" while credit cards are covered by 50+ years of law that Visa et al. take very, very seriously.

Given what we know about the banking industry and what we've seen over the last 10 years, I'd say their "policies" aren't worth the electrons used to draw them on the screen. Give me a credit card any day.

Again, I'm confused here: why NOT use a credit card instead of a debit card?

There used to be an argument for that, however weak: "I can't spend any more than I have in my bank account. If I'm out of money, the transaction won't go through." Well, that got in the way of the bank's INTERNAL policy of "make as much money on fees as possible," so they started happily overdrawing people left and right on demand. People who were ignorant of their account status would spend an entire weekend buying hot dogs and ring tones and whatever, overdrawing their account on each transaction, generating a huge overdraft fee for each transaction. The banks were happy to use the lack of protection on debit cards to line their pockets.

So, please end my confusion: what advantage does a debit card have over a credit card? Because we know what advantages a credit card has over a debit card.

[makryger]

And as barnabas says, the credit cards are usually VERY generous about refunding charges that shouldn't be there.

Credit cards, absolutely. They contain protections under the law.

But Barnabas was talking about debit cards, and they do NOT contain the same protections under the law. There's a reason Visa and Mastercard went down the "use your ATM card like a credit card" route--it was specifically to get around those laws that protect the consumer, laws that interfere with the profits of the credit card companies.

To ignore that reality simply because you've never been burned is silly. Why use a debit card at all when a credit card with stronger protections is available?

Oh, ok. I don't use a debit card at all (except for Costco purchases, because for some reason they don't accept visa). Mostly because the potential for points/ cashback, and improving credit rating are far superior.

[barnabas1969]

Yes, there are federal (and state) laws that govern credit cards (and also laws that govern your checking account which is tied to your debit card). Those laws mostly deal with rate and fee disclosure, how to display stuff on your statement, etc. I'm not aware of any laws that would treat a disputed transaction differently between debit and credit cards.

The way a disputed charge is handled is strictly regulated by Visa and Mastercard. Your bank must follow Visa and Mastercard's "policy" or possibly lose their ability to issue Visa and Mastercard cards. Businesses must also honor those policies, or possibly lose their ability to accept Visa and Mastercard for payments. Visa and Mastercard take those policies very seriously, trust me.

Your bank can also provide even better protection than Visa and Mastercard's policies, and most banks already do. For example, until approximately 5 years ago, Bank of America had a $50 liability limit on all debit card purchase transactions (meaning that the most you'd lose is $50). A few years ago, they reduced that to $0, which means that you won't lose a penny on a disputed transaction that is found to be erroneous or fraudulent. Most other banks have implemented the same policy as BofA.

When you dispute a transaction, the normal practice is to immediately refund your money and then send the dispute to Visa or Mastercard. Visa/Mastercard will then request proof that you actually performed the transaction (signed receipts, video showing your presence during the transaction, etc). If the merchant can't provide the proof, the amount of the transaction (plus a very substantial fee) is withdrawn from the merchant's clearing account.

PIN based transactions, as mentioned by Adam, are different. It was assumed, until just a few years ago, that your PIN was as good as your signature for proof of the transaction. Due to the security breaches of the past several years (where the attacker might have been able to steal your PIN), Visa/Mastercard have added stronger protection for PIN based transactions... that's where the video proof of a transaction comes into play.

Many people do not realize that you can use your debit card without using your PIN. Simply press "credit" when the POS terminal asks if it's debit or credit. Your signature will be required if the amount of the transaction is above the limit set by the merchant. Transactions below the merchant's limit won't require a signature (nor a PIN). If you dispute a non-PIN transaction which is below this limit, it is an automatic charge-back without any investigation. Merchant's set the limit based on the amount of liability they are willing to accept when foregoing the investigation process.

That brings me to another point. Many banks offer incentives (cash back rewards, etc) for using your debit card. Most only pay those rewards for non-PIN transactions. That's because they make money on non-PIN transactions (they get paid a percentage of the transaction from the merchant). Conversely, banks lose money on PIN based transactions because they have to pay a fee to the merchant for those transactions. This is why (smart) merchants encourage you to use your PIN.

In summary, Adam's argument doesn't hold water. I've been in this business for 22 years. I know a little bit about it.

[IownFIVEechos]

You guys all have it wrong.

Use GameStop as your bank!

http://www.businessweek.com/articles/20 ... o-fee-bank

[adam1991]

Banks offer incentives for using your debit card, instead of a credit card, for a reason.

I know a little bit about these things too.

And it's a fact: when the money is gone from your checking account, there always remains a chance that you won't be made whole on your schedule. But with a credit card, it's all just electrons until you pay the bill.

You haven't answered my question: what advantage does a debit card bring to the table over a credit card? What can a debit card do, in a credit transaction, that a credit card can't?

And I'm not talking card-specific incentives. Those vary from card to card, and aren't tied to whether it's debit or credit. (And there IS a reason why a bank would incentivize you to use your debit card instead of a credit card, and it's born out of those pesky laws that interfere with the bank's profits on credit cards.)

[barnabas1969]

Banks offer incentives for using your debit card, instead of a credit card, for a reason.

Most banks which offer a debit card incentive ALSO offer credit card incentives. They make money either way... as long as it's a non-PIN (aka "signature") transaction. And, if you use your credit card, the banks not only make money on the transaction fees, but they also have an opportunity for you to carry a balance from month-to-month and pay interest on that balance. If you go over your credit limit, they charge you a fee... just like when you overdraw your checking account. For the banks, it's a win-win situation.

I know a little bit about these things too.

You still aren't making an argument that holds water. I've been in the banking industry for 22 years, and I may have learned a thing or two along the way!

And it's a fact: when the money is gone from your checking account, there always remains a chance that you won't be made whole on your schedule. But with a credit card, it's all just electrons until you pay the bill.

For the record, I opposed "courtesy pay" from the beginning. "Courtesy pay" is where they allow your debit card to take your checking account negative and charge you a fee for each transaction which results in a negative balance. Thankfully, the Federal Government finally enacted the Credit CARD Act (under the Democrat-controlled Congress of 2009 - BTW, the Republicans in Congress vehemently opposed the Credit CARD Act), which forced the banks to get an opt-in (as opposed to an opt-out) before they could allow your debit card to take your account negative (and charge you a fee for that "service") except under certain circumstances (recurring payments and business/organizational accounts being the most notable exceptions).

Amazingly, Bank of America took the high ground when the Credit CARD Act was enacted. They decided not to ask anyone to opt-in. They just decided to stop the practice altogether. My credit union, on the other hand, sent me a letter telling me how the Federal Government was taking away my "right" to this "valuable service" and implored me to opt-in! I'm sure their letter was effective for those who were not "in the know" (if they even bothered to read the letter).

A few years prior to the Credit CARD Act, there was an update to Federal Reserve Bank's "Regulation DD", which required financial institutions to disclose total year-to-date paid-NSF fees on the customer's monthly statement. Wow. Just Wow. When we updated the statement processes for our clients, we tested it and reviewed many, many statements. It was AMAZING how many dollars some people had paid in so-called "overdraft fees". It was not uncommon to find people who had paid in excess of FIVE THOUSAND dollars for the year in fees.

I can tell you with certainty that even a small community bank or credit union with as few as 10,000 customers was making MILLIONS of dollars each year on those fees. The big banks were undoubtedly making billions. The idea for "courtesy pay" first came about from a for-profit consulting firm who promised banks and credit unions that they could help the financial institutions legally increase their revenue. The consulting firms who jumped on the band wagon were charging the financial institutions a percentage of the take! The update to Reg-DD didn't do anything to stem the tide of money they were earning in fees, even after customers could see the unbelievable amounts they were paying annually in "courtesy pay fees". The Credit CARD Act hurt the financial institutions in the pocket book, and it helped the American consumer immensely... unless the consumer was dumb enough to opt-in to that "valuable service" which allows the financial institution to rape you financially.

So, to your comment... "it's a fact: when the money is gone from your checking account, there always remains a chance that you won't be made whole on your schedule. But with a credit card, it's all just electrons until you pay the bill."

Yep. And now that the Credit CARD Act is in effect, the bank can't allow you to go deeper and deeper into the red, charging you a fee for each transaction that takes you deeper in the red (unless you opt-in). Honestly, it doesn't matter what kind of account it is... whether it's a loan (credit card) or a deposit account (checking)... it's all just electrons until you have to pay the piper. I disagree with your "made whole" statement. Either way, if you spend more than you earn, you will end up in trouble. The credit card just allows you to get deeper in trouble before you have to pay the piper.

And, many people can't qualify for a credit card that gives them a limit large enough to pay all their expenses for an entire month. Those people can't take advantage of the credit card "float"... and people who don't have very good credit don't get credit cards which have a "grace period" which allows them to pay the balance with no interest charges. Additionally, those with poor credit can only get cards which have high monthly/annual fees.

Let's not forget that the credit card "float" doesn't mean very much these days. Financial institutions are paying TINY interest rates on deposit accounts these days. BofA only pays 0.01% interest on balances under $5,000.00, and then it goes up to 0.015% for the next tier! That's ridiculous considering that a savings account used to pay 3.00% just a few years ago. You can keep a few thousand extra dollars in savings while you use the credit card for the month, but it won't earn you much in interest... no where near what the bank will charge you if you go over your limit or pay your bill a day late!

Also, you may not realize this... if you use more than 30% of your credit limit in a month, it hurts your credit score. So, in order to boost your credit score and use your credit card for everything, you need to qualify for a card(s) which is 3.34 times your monthly expenses in order to protect your score. Many, many people can't qualify for that.

You haven't answered my question: what advantage does a debit card bring to the table over a credit card? What can a debit card do, in a credit transaction, that a credit card can't?

See above. If you can qualify for a card with a limit high enough so that you never exceed 30% of your limit in a given month, AND you are disciplined enough and able to pay the full balance every month, then the credit card is the best way to go.

But your argument was that debit cards were "dangerous" and that they don't carry the same protections as a credit card. That just isn't true. I could argue that credit cards are "dangerous" for people who aren't disciplined enough to pay off the full balance every month, or for those who don't have a high enough credit score to qualify for fee-free cards which don't have lots of crazy "gotcha" fees attached, or for those who can't qualify for cards with a high enough limit so that they don't exceed 30% of the limit. I may be wrong about some things relating to Media Center, but you're arguing with the wrong guy about credit/debit/ATM cards. I've been doing this for a long, long time and I've seen every aspect of the process.

And I'm not talking card-specific incentives. Those vary from card to card, and aren't tied to whether it's debit or credit. (And there IS a reason why a bank would incentivize you to use your debit card instead of a credit card, and it's born out of those pesky laws that interfere with the bank's profits on credit cards.)

Take it from someone who is in-the-know. Banks make a profit from your signature (non-PIN) transactions, no matter if it's a credit card or a debit card. They have no reason to incentivize one and not the other. There are more "pesky laws" which interfere with a bank's profit from debit cards than there are that interfere with their profit from credit cards. Banks are now allowed to charge interest rates on credit cards which used to be considered usurious under the law.

And, actually, many of those "pesky laws" are "regulations" and not "laws", but you wouldn't know the difference because you're obviously not someone who has worked in the industry for decades. In my experience, there is more "politics" involved in "laws" than there is in "regulations". Both are subject to political pressure, but by and large, financial "regulations" are more consumer-oriented than "laws" which are aimed at the finance industry. The regulators in the financial industry are influenced far less by the financial industry's lobby than are the legislators. Unfortunately, that doesn't seem to hold true for the FCC.

I'm wrong in some discussions here on this site because those discussions are often not my area of expertise, and I defer to those who have more experience than I do. I have no problem admitting when I'm wrong. In this case however, I've been doing this for a LOOOOONG TIME. I pay a LOT of attention to laws and regulations that affect the financial industry because they affect the decision-making process in my career.

I'm definitely not a shill for the banks and the financial industry at large. I personally lean on the side of consumer protections (yes, I'm a leftie), and I'm very vocal when I see something happening in the industry which negatively impacts the consumer without any real benefit to them. I screamed bloody murder about "courtesy pay" back in the 2nd half of the 90's and early 2000's. Nobody listened. The profit was too tempting. It began as a slow trend, and turned into a rush to grab a buck. I'm so happy that the Credit CARD Act made it more difficult for financial institutions to take advantage of consumers. The unfortunate side effect is that those financial institutions got accustomed to that fee income, and they spent it. Now that the river of cash has dried up, they are looking for ways to cut expenses. This has hurt my long-term job stability. It's funny when you think about it. They were doing just fine before they started collecting all those fees. But when the river of fees dried up, they were suddenly "broke". Kinda like how local governments got drunk on all the extra real estate tax revenue... until the housing market collapsed. (I saw that one coming years before it happened too)

I am able to affect some small change which positively impacts the customers of my employer's clients, but I can't entirely stop things like "courtesy pay", because things like that make a LOT of profit for our clients... and they don't care if I object (until they get sued and have to pay the piper). There are some things, however, which I have been able to change. To give you an example, I have persuaded every one of my division's clients NOT to sort transactions from largest-to-smallest. My recollection of the class-action suit against Barnett Bank in the early 90's has always been enough to sway our clients to choose one of the other two options. Also, when I am asked to create a new process which assesses a fee or interest, I follow the client's specification to the letter. If there is something not-quite-clear, I err on the side of the consumer every time... unless the client reviews the output and asks me to change something so that it has the opposite effect. In my job, I impact literally millions of people's bank accounts. Trust me, I'm working for you.

[adam1991]

But your argument was that debit cards were "dangerous" and that they don't carry the same protections as a credit card. That just isn't true.

Debit cards are NOT covered under the same well established "regulations" (which are backed by case law) that cover credit cards. You do NOT have the same protections when using a debit card as you do when using a credit card.

I don't dispute a bunch of the detail you took the time to write, but you are flat-out wrong if you say that credit cards have no specific advantages over debit cards when it comes to consumer protection.

[barnabas1969]

Debit cards are NOT covered under the same well established "regulations" (which are backed by case law) that cover credit cards. You do NOT have the same protections when using a debit card as you do when using a credit card.

Well, if you're so positive, then please provide links to the regulations and laws to which you are referring. I will gladly find equivalent protections for debit cards and will post the links here.

But, even if you can't find them... I can tell you this. Visa and Mastercard do not differentiate between credit and debit signature (non-PIN) transactions. PIN-based transactions are definitely different, but they are catching up now that it is evident that some PIN-based transactions can be fraudulent without the cardholder disclosing the PIN to anyone.

[barnabas1969]

And, on the subject of PIN-based transactions... I should tell everyone reading this thread that you should look up "credit card skimming" and "debit card skimming" and "ATM card skimming". Before you stick your card into a slot, pay attention!

I routinely try to peel off the keypad, and pull on the card slot to see if it is firmly attached. A gas station near my house was targeted about a year ago. I wasn't fooled. It made big news locally.

[adam1991]

http://www.columbian.com/news/2014/feb/ ... otections/

Speaking of gas pumps, I now choose my pump carefully: I go for the pumps closest to the building, closest to where they can be seen through the window by the people inside. Those are less likely to be targeted by skimmer scammers. The pumps farthest away, facing away from the windows? Easy pickings by the skimmer scammers, with no one to see them.