alt Hacker NewsEuropeans being so scared of debt is so funny. Just pay off your card every month.
The liability model is completely different in the US from Europe w.r.t. merchant vs bank.
The interchange fees are much much higher in the US, which is what pays for the rewards. Europe has an artificial cap.
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> The interchange fees are much much higher in the US, which is what pays for the rewards.
You're just raising the price for everyone for the sake of Visa & Mastercard's profit. Europe's cap makes a ton of sense.
I don't think it's primarily about being scared of debt, it's just a weird, unnecessary step in-between. I have a credit-card and even I don't understand why I should prefer it over my debit card
Data shows they aren't that scared of debt, in fact some European countries have higher household debt than US, notably: Switzerland, Sweden and UK. It's pretty telling that Klarna is a Swedish company.
https://en.wikipedia.org/wiki/List_of_countries_by_household...
10ct vs % of the value. The consumer is paying for that.
But I guess it’s the same logic as the tipping point/ salary culture in the US.
Or the fact that sales tax is not always included in the price.
Your liability comment would mean though that the EU should use it and USA shouldn't.
EU has low fees for transfer, USA has high fees for transfer but apparently its easier for an US Citizen to dispute something.
At least as far as i'm aware, if i send money to someone else, its gone.
Whats that artifical cap?
> Europeans being so scared of debt is so funny.
I've never understood this mentality. It's like walking through a dangerous neighborhood knowing that you have excellent health insurance. If you get stabbed, you'll probably recover very well, but why take the risk?
I can understand going into debt to buy a house, but I can't understand going into debt to buy a can of tuna. Why take an unnecessary risk?
Almost all EU credit cards are automatic debit at the end of the month, i.e. carrying over balance is not even possible. You will simply be over-drafted on the linked debit account and charged a fee + steep interest if you spend more then you have. Typically until the overdraft is resolved, no further debit card payments can be made.
The only reasons to use a CC in EU are:
- online payments where CC is the only accepted form of payment
- delay payments until after receiving wage
- hotels, car rentals, and other places that lock an amount on your card
- extra insurance provided by some more premium cards (VISA Gold etc)
Ever since 3-D Secure (2FA for CC transactions, beyond the CCV code), you have been liable for any transaction that was validated by it. Your bank may still do a chargeback as a courtesy, but that's not guaranteed.