I just read a thread where the comments heavily suggested OP use a credit card when they travel again so that it would be easier to dispute a fraudulent charge. What makes a dispute through your bank less successful?
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When credit cards were brand new, they were typically only utilized by wealthy individuals for major / luxury purchases. It wasn’t until around 1980 (15 USC § 1643) that laws were passed protecting consumers from fraudulent charges on cards. I’m going out on a limb here but if memory serves, credit card companies actually heavily lobbied for this to drive more frequent usage of their cards. The money they were making in annual fees and transaction charges more than made up for the cost of absorbing fraudulent transactions (as a side note, this also heavily incentivized all the anti-fraud investments card issuers would make in the coming decades). In the late 80s / early 90s, card issuers started running heavy ad campaigns encouraging consumers to use their cards for everyday purchases like groceries and gas.
This had a direct impact on consumer spending habits, leading more and more customers to put everything on plastic. I don’t have an immediate source to back this up, but this is very likely when we saw national averages of personal debt skyrocket.
When card-branded debit cards came out in the 90s, they were introduced as a way to ~~collect card transaction fees from consumers who lacked the credit rating to get actual credit cards~~ allow just about everyone to share in the Convenience and Fun ™ of using a credit card. Because these aren’t credit cards, they aren’t covered by 15 USC § 1643. As a result, card issuers can — but do not have to — offer varying levels of protection if they are so inclined.
As a side note, it’s very likely that we may see this protection wane in the coming years. Card issuers argue that credit card usage is common, which was the original purpose of that law — which is true. They also argue that their fraud protection systems are infinitely more sophisticated than they were in 1980, which is also true. And they will argue that even without that law, The Power Of The Free Market ™ will incentivize them to handle fraud properly because consumers can just switch to another card issuer … which is at least half true. Therefore, because automatically paying for fraud costs card issuers money, there’s a financial incentive to move this to a slower manual process, where the burden of proof shifts entirely to the consumer as opposed to the presumptive fraud model of today.
How long until this happens? Your guess is as good as mine, but I’d say we’re looking at a major shift within the next 10-15 years.
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