N26, Revolut, Bunq, etc.: Credit cards vs debit cards

(Alessandro) #1

I apologise in advance if this topic has already been raised.
My question concerns the fact that all of the “nomad” cards mentioned on this site seem to be debit cards. Basically, a debit card allows you to use money that you already have deposited with the card issuer, whilst a credit cards permits one to pay later. OK, I have no problem with that.
However, credit cards also provide additional services. Let me give a personal example: when Primera Air when bankrupt, I had a reservation with them for the following week. My credit card reimbursed me in three days, which allowed me to make a reservation with another company almost immediately.
Am I correct that debit cards like N26 etc would NOT reimburse me in such a circumstance?
Thanks in advance!

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(Philip Broughton-Mills) #2

In that situation, you would report that payment as “disputed” with N26, with the reason “goods not received”. N26 would then raise it with Mastercard, and based on googling experiences, you’d receive the money back a week later.

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(Thomas K. Running) #3

Like @pbm said, you can file a chargeback with a debit card as well. Chargebacks aren’t a legal protection, but part of what the card networks offer (Mastercard, Visa, Amex, etc). As far as I know the major card networks offer the same kind of chargeback protection no matter if you use a credit or debit card.

However, there are two reasons why you might prefer a credit card for large travel purchases:

  1. Although this varies from bank to bank, if you file a chargeback with a credit card you generally don’t have to pay that part of your statement balance until the chargeback is settled. With a debit card (since the money has already been debited) you typically need to wait for the money to be returned to your account.
  2. In some countries (the UK being a notable example) credit card payments might have some additional legal protection, but since most credit/debit cards come with a zero liability protection from the card network, in practice the difference isn’t that significant.

That being said, mostly due to earning more points that way, I usually pay for travel purchases with a credit card (the Chase Sapphire Reserve, in my case).

For a lot of people it’s a lot easier to keeping track of their day to day finances when relying on debit cards, so that will often outweigh the theoretical benefits of using a credit card.

I do mention some credit cards as well (mostly US ones), but since credit cards are generally limited to the residents of a particular country, it’s a lot harder to cover them all. I prefer to write about products I have first-hand experiences with.

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(Alessandro) #4

Thank you to both @pbm and @tkrunning for your answers. I have definitely learnt something (well, I suppose that’s the whole point of this community :wink:). Thanks again.

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