Someone should come up with a credit card that has a dynamic hard limit connected to a checking account balance. Paid daily, too, so the checking balance is almost always caught up. Seems like it would meet the needs of those people while letting them benefit from protections, rewards, etc.

Any reason this couldn't work? Does it exist already?

> Someone should come up with a credit card that has a dynamic hard limit connected to a checking account balance.

You mean a regular bank transaction card? Is that not something that exists in the US?

I always find the American reliance on credit cards somewhat bizarre. Not having an alternative would explain it, I guess.

Debit cards exist but credit cards are often the better option if you're going to use plastic.

The problem with debit cards is because certain transactions aren't instant in the US if there's fraud on your debit card at just the right time then your rent check can bounce, your external transfers are returned, etc, and all that stuff comes with fees and headaches.

Credit cards also come with rewards whereas rewards on debit cards are rare and not as good if they exist. Credit cards usually have auxiliary benefits like (depending on the card) return protection, purchase protection, extended warranty, travel insurance, and more, whereas debit cards have nothing of the sort. THere's no interest due on credit cards if you pay your bill in full every month.

The problem with credit cards is, of course, you have the ability to spend more money than you have, and you can dig yourself into a hole if you don't use that power responsibly.

How likely is fraud on your debit card, though? On credit cards, it's trivial, because the number you need to authorise a transaction is prominently displayed on the card and needs to be shared with the merchant, all of which is of course horribly insecure.

Bank transaction cards in Netherland, presumably all of Europe, and I would hope the rest of the world, authorise the transaction in a reasonably secure[0] way between you and your bank, and the merchant only gets the money.

[0] The main insecure part is that keys are short, because they need to be memorised. But with modern automatically-blocking chip cards, there's no way to brute-force that as far as I'm aware.

In the states, most debit cards look exactly like credit cards.

If they are just as insecure as credit cards, then I can understand they're a poor choice. But why doesn't the US use more secure bank cards?

There’s no such thing as a “bank card” you talk about. It’s called “debit card” and is the exact same thing, with the exact same baseline security.

What is confusing you is probably that European banks push 3D Secure really hard, so most online transactions are further verified, and that chip&pin cards and online readers are prevalent - the same thing Americans call “Apple Pay is supported”.

All that works on debit OR credit cards.

The European (I assume, I only know the ones from Germany) debit cards are distinctly different from credit cards or the debit cards you described in that they

* don't have the credit card like information like card number, verification number or CVC code.

* They are directly linked to a bank account like you described.

* They have the account number (IBAN) printed on them. Knowledge of that number doesn't get you closer to the money in the account, though.

* To actually use them on an ATM or at a POS, you usually use chip and pin. In the POS case, the POS randomly chooses between PIN and your hand written signature as proof of ownership.

* You can't directly pay with them online, though (ignoring extra features some variants have).

* To pay online if you only have one of those cards, you usually pay by wire transfer using your account number, the pin number from above and a tan (a single use number created for this transaction only). Money reaches the recipient between a few minutes and a day later.

* Practically everyone with a bank account has such a card.

Netherland is similar. Online payment is supported not through the card itself, but by the banks through a system called iDeal, which performs a bank transfer connected to a purchase in a webshop similar to how a PayPal transaction would work, except it doesn't rely on a credit card number, but on a through two-factor authorisation process between you and the bank.

The 2FA used to be done with one-time TAN numbers on paper, but many banks switched to a special device that generates these numbers on the fly based on your account, the amount transferred and some random number, and in recent years many banks are switching to a mobile app for dedication. But authorisation always happens through some form of 2FA between you and the bank, and never relies on sending any kind of sensitive information (like credit card numbers) to third parties (merchant, PayPal, whatever).

Sadly, iDeal is only supported by Dutch banks and Dutch merchants (and international merchants that care about the Dutch market, like Steam). I really wish there was something like this that was internationally supported. Relying on sharing credit card numbers, seems really backwards and terribly insecure. Well, it is terribly insecure, as evidenced by all the panic when a company leaks a million credit card numbers. You never get that kind of panic when someone leaks a million account numbers, because in a secure system, that's simply not enough to get any money out of that account.

The current setup seems to favor the card network providers / banks. There's not really an incentive to change. Why it's like that in the first place? IDK.

This is called a debit card in the US, and almost everyone has them - but the key distinction between a debit card and a credit card is that the debit card is a direct link to your bank.

People like using credit cards (or charge cards, like some Amexes) to buffer transactions between the bank and the merchant, so if the merchant screws up there is time to resolve the issue before the credit bill comes due.

If a merchant screws up with your debit card, or it gets skimmed/stolen, the only limit to abuse is how much money is in your checking account. If you just got a direct deposit from your employer and are expecting your rent payment to pull from that account today, but your account was drained because your debit card got skimmed at a gas station... not much you can do.

My solution would be to just ban debt cards and give everyone an EBT card through the post office.

I believe you're describing https://privacy.com/

Lets you generate new debit card numbers with hard limits on the amount the card can spend. I really like them for tracking repeating payments.

That's not a good reason, that's a reason for children. Responsible adults don't do this type of thing.

If you have serious problems controlling your spending, might as well spend someone else's money that you can discharge, versus just have no money in your checking account all the time.