What are the good practical reasons to have a credit card, in terms of actual services you can’t access just with a debit card or with a prepaid card like Wise?
I’m not really interested in the various cashback and credit possibilities - I’d rather have the simplest possible setup. A few years ago I didn’t cancel my credit card mainly because I knew I’d need it if I rent a car abroad, for example (that wouldn’t be possible with a debit card). Now I’m evaluating the situation again, and I’d be thankful to read your experience and opinion about the serices I’d potentially lose access to, if I didn’t have a credit card.
The last several years I run into the situation where I needed a real credit card.
Google services didn’t accept my prepaid card and once a car rental abroad didn’t accept it. I can’t remember which one (neon? yuh?). With WIR debit card I haven’t had this yet.
That’s why I keep poinz and TCS cards just in case, both are free.
Having someone else pay for my bills, giving me 30 days to settle it, with them also assuming the fraud risk for me just seems like a great deal overall.
Interesting, I wasn’t aware of this. My only issue with legal protection in the past few years concerned a debit card (from Neon). I disputed a transaction and was refunded in full.
Do you have examples when you would be refunded on your credit card, but not on your debit card?
It used to be common for rental car agencies and hotels to require a credit card because it’s a better guarantee of payment. I’ve noticed that less and less since the phasing out of Maestro, V Pay, and Visa Electron debit cards in favor of Visa Debit and Debit Mastercard, but you still get it now and then, especially in the US.
With Swiss banks beginning to introduce rewards and cardholder benefits for debit cards, the only real differences now are:
Payments are on credit, which means that if you get refunds, insurance benefits, etc. within the grace period, you don’t have to front your own money in between. The same applies in the case of fraudulent transactions.
You have the option of carrying a balance past the due date. That enables you to use your line of credit as an emergency fund, or to bridge short-term liquidity gaps, for example.
Rewards and insurance cover is still much more common for credit cards than for debit cards, but I expect that to change as the debit card market becomes more competitive, considering the merchant fees for current debit cards are now generally the same as those for credit cards.
For US cards, there is a difference in legal liability. In Switzerland that isn’t really the case, as neither credit cards nor debit cards come with a legal right to zero liability for fraud. But in my experience both Swiss banks and Swiss credit card issuers are very accommodating. I’ve never been refused a refund for fraudulent transactions on either Swiss debit card or credit card.
Thank you everyone for the interesting answers! I didn’t really consider or I wasn’t really aware of a few of the implications of using a credit card vs a debit card.
Now I find myself speculating if a hypothetically constant increase in the usage of credit cards, which are most of the time more expensive for the seller compared to debit cards, would slowly push prices up - or is such scenario abundantly priced in already, at least in the case of big stores…? Probably a topic of potentially endless debate…
I actually switched from Postfinance Credit to Debit card. Since it’s still a Mastercard, it has worked everywhere for me so far.
A few days ago, some fraudster attempted to pay with it. First 1000USD, then 100USD, which I both rejected. Then 0.79USD which went through because it didn’t need approval.
I was wondering if a credit card would have offered protection here if lets say the 1000USD would have gone through.
I’m asking because on the Postfinance website it only says ‘shopping insurance’:
You can dispute a charge within 30 days. That applies to both fraudulent charges and to non-fraudulent charges that you perceive as incorrect.
However, in terms of legal liability, the situation in Switzerland is this: The bank is legally liable for fraudulent transactions IF you fulfil your due diligence as a cardholder. BUT the accepted status quo, from a legal perspective, is that fraudulent transactions could not occur without a breach in due diligence on the part of the cardholder. So basically the cardholder is guilty unless proven innocent. Of course, the bank can be generous and cover the fraudulent transaction for you, and with smaller incidents at least, that is generally the case.
That applies to both Swiss credit cards and Swiss debit cards.
Things are different in the US, for example. There, the legal limits on liability are more favorable for credit cards than for debit cards.
I use a UK credit card, but not sure whether the UK protections extend when you are a Swiss resident.
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