General Question

Tintels's avatar

Is it true Americans do not use bank debit cards in retail and for online banking?

Asked by Tintels (123points) May 20th, 2010

I am from Amsterdam Netherlands. We all use bank debit cards with PIN code all the time for shopping in retail and making transfers online (using little authentication devices). I have the notion that Americans do not use bank debit cards at all. Just credit cards.

1.) Is this true?
2.) Why is this? The cost of credit card transactions is much higher..?
3.) What is the point of using credit with interest if you have money in the bank?

Thanks in advance for your insights!

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43 Answers

jrpowell's avatar

Ummm, I’m in the United States and only use a debit card. It has the Visa logo so it works anywhere that takes Visa but it pulls the money straight from my account.

InspecterJones's avatar

I mainly use debit so..

1. Not true for me and most everyone I now.
2. I don’t understand what transactions you might be even talking about…?
3. The only point (aside from building credit, which most people don’t do) is if you don’t have money in the bank.

Oh, also, some credit cards offer extended warranties on things you buy, like TVs and Computers and other expensive stuff, past the manufacturers warranty.

justn's avatar

I use my debit card for online purchases. I prefer to use cash at brick and mortar locations.

I think the reason most Americans use credit cards is so they can get what they want quickly because they don’t have to have the money at the time of purchase. This spending can really cause some trouble and rack up a lot of debt.

YARNLADY's avatar

No, that’s not true. People use debit cards extensively, and checks are practically old fashioned now. Some places won’t even accept cash, but only debit cards.

augustlan's avatar

I’m an American, and I use a debit card almost exclusively. I think you’ve gotten some bad information somehow!

Also, welcome to Fluther!

Lve's avatar

I am Dutch too and I visit the US on a regular basis. Americans most definitely use their debit card when paying for stuff. The Dutch debit card can be used to pull out money at the ATM. I am not sure the Dutch debit card will work directly at the store, I have never tried. I usually pay cash and try not to use the card much because the bank charges about $3 for the transaction (since it converts the euros into dollars).

MyNewtBoobs's avatar

We use our debit cards loads, it’s just that the credit cards have such massive problems that played into this massive economic meltdown that you hear about them sooooo much more. Plus, sometimes when they are talking about credit cards on the news, they are including debit cards.

MyNewtBoobs's avatar

@lye probably better to just buy a pre-paid credit card at the local grocery store during your stay, put some money on that, and just have the fee that once.

markyy's avatar

I think much of the image of Americans using mostly credit cards comes from:
• Media and entertainment
• Traveling American’s relying on credit cards
• Most webshops offering only support for credit cards.

As a Dutchie myself, I can’t offer insight as to why Americans rely on credit cards so much, but I can tell you why the Dutch don’t rely heavily on creditcards when shopping online.

The Dutch banking system is accommodated to use DIGIPASS readers (little authentication devices) to generate a code based on your pin that can be used to login on your banks website and access all your back account details online. I’m pretty sure the Americans have this too, but I do think we have a unique online payment method called IDEAL that makes use of the same DIGIPASS readers. It’s IDEAL that render credit cards pretty useless for local online purchases.

The idea is pretty simple. Websites can add IDEAL as a payment option to their site, just like adding creditcard and paypal support. But instead of a middle man (like paypal or the cc company), you pay directly with your bank account. It only works because the Dutch banks have agreed to work together on this and standardize the process. Which makes it hard to scale up the service to banks outside of Holland, but as I understand they are trying to. Maybe even up to a point where you no longer have to rely on credit cards to purchase stuff online.

MyNewtBoobs's avatar

We use credit cards so much because you don’t have to actually have the money right then, which is supposed to be great for those times when you need a car repair or a trip to the emergency room, but don’t have the money. However, when you have a society based on consumerism, and your worth is based on how much crap you have, it’s little surprise that pretty much everyone would use them to buy designer jeans instead when they didn’t just not have the money right then, but wouldn’t have the money until they got a much higher paying job (and then they didn’t get a higher paying job). Combine that with, until Sep. 08, credit card companies and banks making it easier to get a credit card than gonorrhea, and butt-loads of people who were making 30 and 40 thousand a year had the “means” to spend like they made 150 thousand a year.

jazmina88's avatar

I use my debit card as a visa and get rewards. I think folks are tryin to be lean and mean and not put so much on cards. I have.

augustlan's avatar

Just to clarify, my debit card is a Visa debit card and is accepted as if it were a credit card everywhere that accepts credit cards.

Cruiser's avatar

I used to be that way as I am thick as a brick when it comes to online anything. I recently found out that my “bank” provides better protection for online transactions with my debit card so it is now my exclusive card that I use.

MrItty's avatar

1.) Is this true?

No. Americans use cash, credit cards, debit cards, and checks.

2.) Why is this? The cost of credit card transactions is much higher..?

No it’s not. There are no fees to use a credit card. The only thing I can think of that comes close to this is that SOME gas stations have a higher price for credit card transactions than for cash transactions. In general, paying with credit card costs the same as paying with cash or debit card.

3.) What is the point of using credit with interest if you have money in the bank?

What’s the point of deducting money from your account before you have to? Interest is only charged on your credit card transactions if you don’t pay off your balance every month. If I use my credit card for everything (which I do), then the money stays in my account and collects interest for another 30 days or so, and I don’t pay the credit card company any interest. Plus, the credit card comes with benefits like cash back or airline miles, which cash and debit cards do not.

Blackberry's avatar

What @johnpowell said. It’s debit card, but can be accepted as ‘credit’. I have not put my PIN in anywhere for like 2 years lol.

reverie's avatar

I am from the UK and like @Tintels, I also had the impression that people from the USA used credit cards much more frequently. It’s good to have the correct information, so I’m pleased you posted this question!

The reason I thought that people from the USA used credit cards a lot was because in my experience of online retail websites, based in the USA, when it comes to taking payment, it often justs asks for the customer to enter their “credit card” details. In the UK, it tends to ask for “credit/debit card” details, and this is why I made this incorrect assumption about card usage in the US. In the States, do people use the term “credit” and “debit” interchangably when referring to payment cards? Or is this something that is just an odd little thing that happens to have been on the few US shopping websites I have visited? If I remember correctly, the ones I saw just asked for credit card type, credit card number, and so on. I didn’t realise that it would the be okay to just enter debit card details instead.

MrItty's avatar

@reverie It’s not that we use them interchangeably. It’s that most debit cards with our banks are provided by Mastercard or Visa, and so can be used as though they were credit cards. If a website asks for a credit card, it will not accept a debit card that is just a debit card. That is, a card provided by your bank that doesn’t have a credit card logo. But it will accept a debit card that can be used as a credit card.

reverie's avatar

@MrItty, I think that’s where my confusion is coming from. My debit card, provided by my bank here in the UK, is a Visa card. It isn’t a credit card, and can’t be used as one. My bank offers a Visa credit card, but this is a different product entirely. I think this is where I’ve got muddled up!

Taciturnu's avatar

I agree with @MrItty. We use our debit cards as a credit card, but because the money is taken directly from our checking accounts we don’t face any interest fees. The ones without a credit card logo can not be used as a credit card for online or in-person sales- only at point of purchase sales in which you can enter a PIN.

john65pennington's avatar

I never use credit cards. that plastic will ruin your life and credit score. debit cards are used only. i never purchase anything online. its not safe. hackers are just lying in wait to retrieve your card numbers and your money.

MrItty's avatar

@reverie that’s very odd to me. If your debit card is a Visa card…. what the heck does that mean? If it can’t be used as a credit card, what is the point of Visa providing it?

I should make sure I’m being clear too – when I say “can be used as a credit card”, that doesn’t mean that you can use it and the money doesn’t have to be available right away. It just means that you can use it anywhere you can use a credit card. The money will still come out of your checking account right away. If you don’t have the money in your account, either your transaction will be declined (like if you’d gone over your credit limit) and/or you’ll be assessed overdraft fines.

MrItty's avatar

@john65pennington I’m sorry, but everything you just said is 100% false.

reverie's avatar

@MrItty, I don’t really know! I find it all very confusing. It is provided by Visa, and has my bank’s name and the Visa logo and the words “Debit Card” stamped on it, and it basically, like your cards, it won’t work at all if there’s no money in the bank account that it’s attached to. It is accepted everywhere here, but I don’t really know of anywhere in the UK that wouldn’t accept a debit card (places are far more likely not to accept credit cards, or place a surcharge on the transaction if you want to pay with a credit card). I’m tempted to try and buy something online from the States now to see if it accepts that it can be used like a credit card over there! There seems to be some more info on Wikipedia about it (it seems to use the “offline debit system”). For me to have a Visa credit card, I would need to apply separately to get that, and it would be a physically different card with different numbers and so on. I’m pretty sure that’s how all debit and credit cards work in the UK (or at least, this is how mine works, and it’s how it works for my chums too!).

It’s interesting to learn about the different systems, thank you for explaining how your cards work… it will be good to have this info if I ever visit the US!

IchtheosaurusRex's avatar

I use mine every day. Groceries, gas, just about everything I can buy with a credit card locally, I use my debit card for. I don’t use it for online transactions because those are less secure, and you run the risk of somebody getting your card number and cleaning out your bank account. My card has a $300 limit on transactions, so if I have a $400 car repair bill, I have to pay some other way, but in most circumstances, I prefer it.

Sarcasm's avatar

As an American, I was under the impression that the vast majority of Americans used credit cards.
I exclusively use debit cards and cash, though. When I tried to get a credit card from my bank, they told me that if I don’t have a job, they can’t give me a credit card, only a debit card.

Seaofclouds's avatar

I think some of the illusion that we use credit cards is because a lot of people say not to use debit cards in certain situations (like at the gas pump or online). I’ve read more stories than I can count saying that it’s dangerous and it’s better to use a credit card because if a fraudulent charge shows up, you can dispute it without losing the money right away. If you find a fraudulent charge from your debit card, you are out the money right then and have to wait for the bank to reimburse it if then agree that it’s fraudulent.

That being said, I only use my credit cards in case of an emergency (meaning I can’t afford to use the money out of my bank account at that time). I have 2 credit cards and neither one of them has been used in years. I have had my debit card number stolen once. I reported it to my bank (USAA) and had a new card FedEx’ed to me within 2 days and the money back in my account within a week. My card number was stolen by a merchant here in the states and not from online use. We don’t keep all of our money in one account, so it really didn’t affect us while we waiting for USAA to get our money back. I still only use my debit card (which has a Mastercard logo on it).

downtide's avatar

When I visited the USA I was able to use my British debit card (Visa) just about everywhere.

nikipedia's avatar

I use my debit card almost exclusively. I recently had to dig up a credit card to pay for some work expenses that I will be reimbursed for—I preferred this to pulling money out of my savings account or risking overdrawing my checking account. This is the first time I’ve used my credit card in about a year.

Incidentally, I also do not eat at McDonalds or drive an SUV.

InspecterJones's avatar

I think the brits are just confused cause their websites always say debit/credit while our websites just say credit card.

I assure you, our system works the same way, the websites here just assume you know that you can use a debit in place of a credit.

Our debit cards dont carry credit on themselves, they only draw money our of the bank. (Unless some banks issue dual cards which are both debit and credit)

Primobabe's avatar

No and no. If I’m short on cash, I’ll use my debit card for a retail purchase. I also do all of my banking on-line or through an ATM; why wait in a queue?

YARNLADY's avatar

Responsible use of credit and debit cards, with proper protection in place, can result in better money management, along with many advantages over cash and even checks.

tragiclikebowie's avatar

Some foreign, and domestic, debit cards are not associated with a major credit card company. Those can really only be used to take money out of an ATM here, it will generally not work at stores or online. We group our debit and credit cards together because you can charge our debit cards as credit or use a PIN when paying.

vbabe96's avatar

I use my debit card as credit. Meaning I have a debit card with a pin number I just choose not to enter the pin number. I do this only because I earn points. Points which I spend to buy gifts for family and friends.

john65pennington's avatar

Mritty. he is the basis for my answer. have you ever been in a bankruptcy hearing in court? did not think so. i was a Deputy U.S. Marshal for five years. i worked guarding the Federal Judges and their courts. bankruptcy court was one of my assignments. for just one day, the amount of credit card debt presented in bankruptcy court was $500,000.00. easy plastic had ruined the lives of many debtors and they were seeking relief through the court. thats just for one day. multiply than times 5 days a week and maybe now you will understand my answer, concerning credit cards. and, concerning card numbers online and hackers, apparently you have never heard of the thousands of hackers working in South Africa. they wait like hawks to discover your card numbers, sell them and make a profit for whomever they work for. and, this does not even include identity theft. i disagree with you on me 100% incorrect. the statistics speak for themselves.

MrItty's avatar

@john65pennington Don’t you see that your experience is exactly why your point of view isn’t valid? You were a cop. Your entire life revolved around catching criminals. All the billions of people who have had absolutely NO PROBLEMS WHATSOEVER with credit cards never even entered your perception.

You’re like a high school principal who thinks all kids are delinquents. No, they’re not. It’s just that the only kids he ever sees are the ones who get sent to the principal’s office.

john65pennington's avatar

Like i said, the stats speak for themselves, no matter if the information came from me or a clerk at the newspaper office. the figures do not lie.

MrItty's avatar

@john65pennington Okay, so what are the statistics? You haven’t given them. You’ve told us how many people you saw on a given day. How many did you not see? How many credit card users are in there in the world vs how many have gone to bankruptcy court because of them? How many credit card transactions are there in a given day vs how many have been intercepted by hackers?

Something tells me you haven’t bothered to compute the statistics yourself.

john65pennington's avatar

You are just looking for a big discussion at midnight and its too late. i will compile the figures, give you a location to check yoursel, tomorrow.

YARNLADY's avatar

@john65pennington Do you also refuse to ride in cars because they are one of the leading causes of death in the U. S.? Or does the 6% fraud rate seem worse to you?

InspecterJones's avatar

The main way to build credit is to have and use credit cards, so they don’t ruin your credit, your decisions in how to use them do that.

MrItty's avatar

@john65pennington I look forward to it.

Response moderated
jerv's avatar

@john65pennington I have to agree with the others here. Also, you forget to take into account the crime rate associated with cash…. or have you never run into a single case of robbery or any muggings in your career as a aw enforcement official?

The truth is that life is full of risks, and the concerns you bring up are comparable to or less than other risks we take in life. Also, people have many ways of expressing stupidity; some do so with plastic, some with beer and car keys, and some do so with a keyboard and monitor.

Plus, I feel that @MrItty raises a valid point. I mean, you have to admit that you’ve seen some of the worst humanity has to offer because that was your job for longer than I’ve been alive. I am jaded as hell, and I am both younger than you and have had less exposure to the dark side of humanity than you have, so I can’t imagine how cynical you must be!

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