The rise of the chip card may have fixed that; it's been a long time since I've had a problem. But I'm reluctant to find out.
Every single thing I'm actually paying for goes on one a handful of cards.
Does being a US resident have any meaning here? I mean, does the rest of the world not secure credit card payments, or does the rest of the world secure debit card payments like the US secures credit card payment?
Note that the above is about the number, which is not secure in any situation. You don't need to have someones credit card, you just need to know the numbers. If you compromise an insecure website and get these details (bank rules don't allow storing the numbers, but if the website doesn't follow the rules). You can also take a picture of a card as someone is scanning it.
Europe went to the chip and pin system, plus a system where they bring cards readers to each table because they did not have the above protection for credit cards. Thus in Europe you would be a fool to let your waiter take your credit card to a backroom to pay for a meal because the waiter can then copy the numbers and/or the magstripe, and then use your credit card after returning the physical one to you (again, this is 20 years out of date, laws have changed but I don't know how!). Since the US has (20 years ago) better consumer protection laws around credit cards, people didn't care that chip+pin was more secure as practically it didn't make any difference, and for a while banks figured it wasn't worth caring. Once banks started caring everyone switched to the chip in the US - but we mostly don't use a PIN as the annoyance of needing to remember a PIN isn't worth putting on consumers here. (also Europe has made the portable terminals cheap so you find a lot of portable terminals here as well so cards are less likely to leave the owners hands thus making the PIN less important)
The motivation of Chip&PIN in EU is driven by the fact that banks are forced to cover most of the fraud costs (as opposed to USA, where much of stolen card fraud is forced upon merchants), so they have a motivation to actually prevent it; and the inconvenience of PIN is mitigated by highly prevalent contactless (and PIN-less) chip payments for small transactions.
Not sure if a fraudulent charge of a debit card is a thing I ever heard of in Europe. These cards have also been using chips for over 20 years. Maybe they work differently here.
To me credit cards sound less secure than debit cards: debit cards have chips and pin codes. With credit cards, knowing the number is in theory enough (they have digital verification now too though). Also, with debit cards, you put it in the payment terminal yourself.
With credit cards, in the US I've had the waiters in restaurants taking your credit card from your table, walking to somewhere else with it, and giving it back to you later. I had never seen that before (In Europe, they carry a portable payment thingie in which you can put/tap credit or debit cards to the table). How is that more secure? They could easily copy the number there.
A slightly different but similar issue is paying for services in advance but never rendered. When that happens on a credit card I just inform the card issuer and they handle it.
We were going to get a large water purifier from Costco. On the order of $6000. We paid, but we had 3 days to cancel. We found it for significantly cheaper the next day and cancelled. 3 months later Costco still hadn't reversed the charge, so we challenged it with the credit card company. Fixed in 24 hours.
Also, it's worth pointing out that when you challenge something successfully, it's effectively like it never happened. Interest gets rolled back and you can call to have late payments associated with that time period striken from your credit report.
On the flip side, I would never use a debit card. I've been told "your pin was used so it must have been you" when contesting small things there. Credit card have chips and some banks allow you to use pins.
If someone steals your card and can guess your pin, then you're out of luck in filing any claim because obviously you disclosed your pin.
Key is never having outstanding debt. Pay your credit card balance in full. Most people with credit cards do this. I have never met anyone who paid any interest on their credit card because everyone I know pays it in full each month.
> And I have never met anyone who had a fraudulent charge (without being dumb).
And? The point is if it happens, you are far safer with a credit card than a debit card. Once the money is gone from the credit card, it's the credit card companies problem. Once the money is gone from your debit, it's your problem.
> To me, I cannot understand why anyone would use a credit card unless debit isn't accepted.
Because credit card is more secure. As the OP already told you.
As long as you have financial discipline, using a credit card is smarter than using a debit. It's a simple concept.
- With a debit card, I am out $X of my own money, until the bank can be bothered to agree that the charge is fraudulent and refund my money, which can take weeks or months, if at all. Good luck paying rent or buying food or whatnot in the meantime if you don't have a nice savings cushion.
- With a credit card, I am out $0 of my own money, and now the bank is potentially out $X of THEIR own money, making them significantly more motivated to investigate promptly and agree that the charge is fraudulent. For however long this takes, I still have my own money to pay rent and buy food, and I'm not on the hook for paying the fraudulent charge.
The fact that credit cards tend to have "rewards" in the form of cash back or airline miles or whatever is secondary to me, personally, although I do take advantage of this as much as possible.