A credit card is ideal for online, since you’re buffered from fraud (since you don’t pay any disputed amounts, unlike a debit card where you’re fighting to get real money returned).
Well, in recent year the credit card companies have nicely reduced their fraud risks by introducing various convoluted two-factor authentication schemes. Which have done a great job in protecting me not only from fraud, but also from spending money on spontaneous online purchases ...
Really?! Just now? Weird! My US-based credit cards never had any 2FA, and my main Swiss card used to have it, but seems to have abandoned it. (My other Swiss card never had it at all.)
Well, many vendors accept nothing but credit cards, as I said.
No good idea if you want to do business in Germany, you're going to exclude 60 %+ of your potential customers right off the bat.
Do you really only order from vendors within your country?!? (When I was living in USA, this was mostly possible, but here in Switzerland, absolutely impossible.)
Generally, offering diverse payment options, or utilising a payment provider that does so is going to greatly enhance your conversion rate. Some businesses are voluntarily foregoing money and giving their competition an edge.
Yes, but to be honest, it’s widely understood that credit cards are the default payment method of the Internet. I don’t really understand some people’s aversion to credit cards.
Maybe I'm also a bit oblivious on how people in countries with widespread credit card use handle money. What is the use-case of an on-demand credit for every silly small purchase you make? You get your income on your transaction account, some cash savings on your deposit account, and the rest invested on some mix of financial instruments to suit your needs. How does it matter whether your variable expenses are now withdrawn at the time of purchase, or combined on the end of the month? Like, I get how that could be attractive if you had no spending discipline whatsoever while simultaneously living from paycheck to paycheck, but, really?
I already listed one potential advantage: you are buffered from fraud. If you use cash or debit, real money is gone, and you are fighting the bank to get it back. If it happened to be your last money, you are fucked, since even if you get it back eventually, you might have been unable to pay bills in the meantime. With a credit card, a disputed amount is not due. So if some scumbag company gets your CC number somehow, it can’t cause cashflow issues.
Second, many credit cards offer cash back. Why
wouldn’t you want a discount on everything you buy? This is my main reason for paying for everything I can on credit, rather than debit or cash.
Third (although this varies a LOT by country), credit cards offer varying purchase protections, like free extended warranties, travel insurance, car rental insurance, etc. I had one computer repair that was covered in year 4 (in my case, during the extra year of free warranty AmEx gives me, after the 3 year extended manufacturer warranty ran out), and that single repair saved me more money than all the annual fees I’d ever paid for that card added up.
Similarly, one of my Swiss cards gives me travel insurance for all trips (even if not paid for with that card!!), at a lower cost for the annual fee than it would cost to add travel insurance to a single long-haul flight.
Fourth, travel: credit cards are essential for international travel, since they are the most universal way of paying for things worldwide. No other payment method can be used in as many places. I used to get foreign currency for traveling, but now, I only get petty cash in local currency, and everything other than little snacks, I pay by card. It’s safer, and it means not having to deal with large amounts of excess foreign currency afterwards. Additionally, in many countries, you categorically cannot rent a car without a credit card.
As for cash vs. debit: I like not having to worry about whether I have enough cash in my wallet. It’s nice to simply not have to go to the ATM any more. I’ve gone nearly 100% cashless now. Heck, now that all my credit cards support Apple Pay (which is
more secure than the physical cards it replaces), and the transit authority lets you load your passes into the app, I could even leave my entire wallet at home 99% of the time...
(In USA, some small businesses are starting to accept card only, since not handling cash means eliminating the risk of cash theft by robbers or employees, not to mention eliminating the effort of having to go to the bank to make daily deposits.)
Finally, as I mentioned before, credit cards provide immediate payment in an emergency. I’ve been lucky to never have to do it, but it’s good to know that if I needed to, I’d be able to pay for a rental car, healthcare, a hotel, or whatever.
Now, I know that what works for me will not work for everyone. I’m someone who always pays off his credit cards in full — I don’t use them to buy things I can’t afford. I know that for some people, they can’t handle that, and would end up in debt. But even so, I wouldn’t normally recommend having no credit cards at all, but rather just not keeping them in the wallet. (Some people freeze the card in a large block of ice, so that they are forced to “sleep on it” before making a CC purchase.)
I know that Germany is a particularly credit-averse country, but I think you guys need to understand that credit cards exist primarily as a universal payment system, not as loans. It’s about convenience and peace of mind, not about spending money you don’t have.
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