Fintech is making credit cards weirder
The concept of a credit card is an anachronism that filled a local maximum and is only kept there because those who have the power to change things benefit from the status-quo.<p>Back in the early days of payment cards, settlement took days or weeks and checking whether the customer had enough balance in real-time wasn&#x27;t possible. The technology to make a <i>debit</i> card just wasn&#x27;t there, so it makes sense that payment cards started as being credit.<p>In this day and age, there is no functional difference between a debit or a credit card - both are processed online in the vast majority of cases, and even debit cards will typically allow offline transactions up to a certain amount if the terminal can&#x27;t check the balance online. Banks now issue both and your current account and credit card account can very well be rows in the same table of the same DB if you obtained both from the same bank. There are regulatory differences (in regards to fraud protection for example) but those are just because the law didn&#x27;t catch up (or doesn&#x27;t want to catch up - see last paragraph) rather than a technical difference.<p>Nowadays there is no reason why credit should be tied to a specific card &amp; account with very rigid rules regarding repayment schedules and fees. If you want to lend, just put the money into the customer&#x27;s current account and let them use that amount with their debit card. Even better, we already have real-world implementations of this - most accounts offer an arranged overdraft which allows the balance to go negative and automatically repays itself as soon as you deposit money in. Some banks will even &quot;helpfully&quot; authorize transactions despite the lack of an arranged overdraft, just to immediately slap you with an unarranged overdraft fee. Clearly the technology is there and has been proven.<p>The reason credit cards persist is because their rigid, often complex, and nonsensical - why should the <i>same</i> bank charge different fees or interest depending on whether it&#x27;s a CC vs overdraft usage? - rules allow these banks to offer &quot;free&quot; money (in the forms of 0% interest or benefits) to those who know how to play the system to their advantage, subsidized by the poor and less financially-savvy who don&#x27;t know or can&#x27;t afford to play the system and end up getting played by said system instead, incurring late payment fees and&#x2F;or interest.