But thanks to consumer protection laws, if somebody steals money off your credit card, they've stolen the BANK'S money. It's up to the bank to get it back.
Personally, I think they should, because they have access to the aggregate data that could prevent more of it.
Because they take no hit for online fraud, however, they do almost nothing to make things better.
Although apparently it's a crappy protocol and it's used to shift liability to customers[1], so yeah, they could do better.
[1] http://www.cl.cam.ac.uk/~rja14/Papers/fc10vbvsecurecode.pdf
For credit cards, US law limits your personal liability to $50 (typically $0). "Under the FCBA, your liability for unauthorized use of your credit card tops out at $50. However, if you report the loss before your credit card is used, the FCBA says you are not responsible for any charges you didn’t authorize. If your credit card number is stolen, but not the card, you are not liable for unauthorized use."[1]
If you contest a charge, you are NOT required to pay that amount until the matter is resolved. Resolving it typically takes two or more months, but it isn't your problem and doesn't affect your life during this period. If it is resolved in your favor, dealing with the loss/recovery/reversal is not your problem, it is like it never happened (for you). The bar you need to achieve to show a charge was fraudulent is pretty low - typically a phone call to challenge the charge and a followup letter with a statement and any documentation available (as simple as stating you did not order/receive the goods shown or the goods were damaged).
Debit cards typically have limits to liability, but the stolen money is not restored until the matter is resolved. It typically is a LOT more work and can be several months to get the card issuer to make you whole again. Also, with a debit card, the theoretical limit of what the thieves can take is ALL the money in your bank account (and more with overdrafts). The bills don't stop while you are unwinding the mess and your money is unavailable... You can end up in a big hole; restoration of original funds that were stolen does not make you whole because of the "knock-on" charges and losses while your money was unavailable.
[1] https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-cr...
Credit cards are annoying that your balance isn't updated immediately, they're much more costly to operate, more fraud tolerant (just need to copy the numbers) while the benefit only applies to US and maybe a few others. Meaning, any bank here will pay you back regarding debit card fraud similar to the other response.
Credit/debit cards; it's weird that having such a card results in so many differences other than paying on credit/debit.
The merchant is already pricing in credit card fees into their prices, so you should go with the payment instrument that provides you the best protection and other perks — otherwise you are leaving value on the table.
I don't know what it's like in the US, but at least in Sweden basically all credit cards have an annual fee.
If you just think of your credit card as a delayed bill, where you can quibble over charges trivially, they're not like debt at all. Always pay off in full every month, automatically.
Which I find a bit weird, a Prepaid Card is my safest option considering I have no want for a Credit Card at all. I pay my bills immediately or as early as possible, I don't even like ongoing costs and I try to buffer then into yearly payments if possible (which usually also means you get stuff cheaper)
A debit card won’t.
I had to explain this to a school friend recently as he has never owned a credit card and avoids loans - preferring to save first, then spend.
When it came time to get a mortgage he couldn’t get good rates - or a large enough loan - as his credit history was so lacking.
He was infuriated but I pointed out to him that it makes sense from a lenders point of view: they gave no record of him being able to manage debt responsibly.
So that’s one reason to use a credit card, though likely not any reason Frank would suggest (he’s going with their better protection and coverage)
He does mention it: by giving his sons a credit card, one benefit is that when they graduate college, Frank has essentially built their credit for them.
They are also often the best method consumers have to borrow money for many purposes.
(The only exception would be in a deflationary environment.)
Seems a bit like Trump supporters.
Although it has to be said a running balance is not actually a direct credit risk. It doesn't make financial sense, as you're racking up interest fees, but if you are safely managing your payments (no late ones) and your credit usage (a percentage of what your total available credit lines are) then it's not a bad thing for your credit score.
Not that I would recommend it of course.
The more you demonstrate your ability to manage debt (and you can do that by simply paying off your card every couple of weeks) the better you demonstrate your ability to do so. More data points, so to speak.
Of course if you can't manage that then that's data too.
End result: http://www.usdebtclock.org/
From my point of view, using a debit card is far superior to using a credit card. Why would I want to debt myself to pay stuff? I have enough on my account to pay for a mere AirBnB. I don't want to indebt myself. yet, there is a system which forces me to.