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  1. #1

    Banking - the differences btween Canada and USA

    So i was talking with a good friend from the US as we were doing our raid last night, he mentioned that he had to go to bank to get cash to do some shopping, pay some bills etc.

    I was a little perplexed and asked why doesn't he do that all online, as in his banking / paying bills / etc After a bit of a discussion on this i came away with this info and perhaps more Americans can add to this as it quite the diifference from how we Canadians do things.

    1. We heavily use debit cards. These are bank cards that you pay with (do not confuse with a Visa/Mastercard/etc), the funds come right out of your chequings/savings account. Apparently the USA does not use this much? Weird. We use these heavily to pay for things like restaurants, clothing/shopping...every day use where we used to use cash...like 25 years ago or more. Matter of fact, people rarely carry or have the need for cash.

    2. We pay all bills online through our banking. We can see all transactions on the fly, I can send my brother money (IE 500 bucks) through email and he can accept and it will go right into his account.

    These are the banking options Canadians use very heavily but from what I understand, our US cousins do not, which i found very strange.

  2. #2
    Quote Originally Posted by Grogo View Post
    1. We heavily use debit cards. These are bank cards that you pay with (do not confuse with a Visa/Mastercard/etc), the funds come right out of your chequings/savings account. Apparently the USA does not use this much? Weird. We use these heavily to pay for things like restaurants, clothing/shopping...every day use where we used to use cash...like 25 years ago or more. Matter of fact, people rarely carry or have the need for cash.

    2. We pay all bills online through our banking. We can see all transactions on the fly, I can send my brother money (IE 500 bucks) through email and he can accept and it will go right into his account.
    1) Americans heavily use debit cards as well. Also, there are ATMs just about everywhere even in rural areas.
    2) Americans heavily use online bill-pay. Most banks don't allow xferring of funds through email due to potential for fraud, but they have similar measurs in place.

  3. #3
    I think its just your friend. I'm American and I do 98% of all my shopping with a debit card. The only difference it seems between us based on your description is that all our debit cards also seem to be branded with a major credit card company too (visa debit or mastercard debit usually). They still take the money directly from our account but the transactions are signature based instead of PIN based.

    All of my bills with the exception of my rent are handled online, and electronically withdrawn from my account, which I can see online every detail and transaction (including copies of cleared checks and deposits) that posts through at a glance.

  4. #4
    Debit cards are indeed popular in Canada, but that's just proof that most people don't realize how horrible that is. Why would anyone in their right mind use a debit card instead of a credit card which offers rewards or cashback? I mean, I'm Canadian and I cringe every time I see someone use a debit card.

    But as the poster above me said, these things are also popular in the U.S.

  5. #5
    Quote Originally Posted by Carazy View Post
    1) Americans heavily use debit cards as well. Also, there are ATMs just about everywhere even in rural areas.
    2) Americans heavily use online bill-pay. Most banks don't allow xferring of funds through email due to potential for fraud, but they have similar measurs in place.
    Well, I am confused, Canadians have told me after visiting the US, that the debit cards are rarely used and a lot of businesses do not have the option.

    ---------- Post added 2012-02-17 at 03:23 PM ----------

    Quote Originally Posted by FathomFear View Post
    Debit cards are indeed popular in Canada, but that's just proof that most people don't realize how horrible that is. Why would anyone in their right mind use a debit card instead of a credit card which offers rewards or cashback? I mean, I'm Canadian and I cringe every time I see someone use a debit card.

    But as the poster above me said, these things are also popular in the U.S.
    Actually that is a good point and you would cringe at me as well hehe

  6. #6
    If your debit card has a Visa or Mastercard logo, it'll be accepted anywhere in the US. Cards from major banks will have the logo.

    I haven't paid a bill with cash or check for... probably a decade. I pay them all online. I write exactly 12 checks each year, for rent, because my landlord wants to be paid that way.

  7. #7
    Quote Originally Posted by Grogo View Post
    Well, I am confused, Canadians have told me after visiting the US, that the debit cards are rarely used and a lot of businesses do not have the option.
    They are as confused as Americans who visit Canada and think you die of old age before you can see a specialist doctor with your healthcare. Americans do, in fact, very often use debit cards. As the poster above me stated, few even carry around cash or checkbooks.

  8. #8
    The Patient
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    A 'debit card' without a logo is an ATM card, at least in the states. There are very very few businesses that accept a non-backed ATM card to pay via 'debit'.

    A 'checking card' or 'debit card' with a logo (visa, master card, etc) may be used exactly like a major credit card. I make almost 100% of my purchases with a visa backed debit card issued by my bank.

    There are not too many cash transactions anymore, mostly with older folk, or younger folk who are not allowed to have a debit card due to liabilities or having no cosigner on their account. Your friend is very atypical in how the average American utilizes money, and probably a poor metric to base an assumption on.

  9. #9
    OP, Americans use all of those things you just described. try not to base your views of over 300 million people on 1 guy who is probably a drug dealer and thats why they only use cash haha

  10. #10
    Hah, fair enough, you guys cleared that up for me.

  11. #11
    So do most Americans still get a paycheck at the end of the week/month or get their wages deposited directly onto their bankaccount?

  12. #12
    [QUOTE=Illuwin;15547723]A 'debit card' without a logo is an ATM card, at least in the states. There are very very few businesses that accept a non-backed ATM card to pay via 'debit'./QUOTE]

    Most places these days have an Electronic Balance Transfer option on their card-swiping devices and can take debit cards. If you try to pay with a check, they'll just swipe it and hand it back to you. I live in a major city, though, so experiences in less urban areas might differ.

  13. #13
    Quote Originally Posted by Bolson13 View Post
    So do most Americans still get a paycheck at the end of the week/month or get their wages deposited directly onto their bankaccount?
    Most companies offer either option. Everyone I work with opts for direct deposit.

  14. #14
    Why would anyone in their right mind use a debit card instead of a credit card which offers rewards or cashback?
    1. Interest kills
    2. Those rewards are used to pull you into their scammy business

  15. #15
    The Insane RICH8472's Avatar
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    Quote Originally Posted by FathomFear View Post
    Debit cards are indeed popular in Canada, but that's just proof that most people don't realize how horrible that is. Why would anyone in their right mind use a debit card instead of a credit card which offers rewards or cashback? I mean, I'm Canadian and I cringe every time I see someone use a debit card.

    But as the poster above me said, these things are also popular in the U.S.
    Because you do not pay interest or fee's for using debit cards, whereas you have to pay for the privilage of using a credit card.

    The so called "rewards" offereds by credit cards companies are just there to trap you. I would rather be debt free and only spend what i can afford with a debit card.

  16. #16
    Quote Originally Posted by RICH1471 View Post
    Because you do not pay interest or fee's for using debit cards, whereas you have to pay for the privilage of using a credit card.

    The so called "rewards" offereds by credit cards companies are just there to trap you. I would rather be debt free and only spend what i can afford with a debit card.
    Depending on your particular credit card agreement, you keep the rewards and avoid any fees by paying the card off every month. Mileage may vary.

  17. #17
    Quote Originally Posted by Carazy View Post
    Most companies offer either option. Everyone I work with opts for direct deposit.
    Hmm. probably just US culture made by hollywood then I guess.

    Also, those debitcards have mastercard of visa logo's correct. Because in Europe they have maestro which looks similar to the master card logo. It is probably a daughtercompany of mastercard. Probably because their companies infrastructure is being used for atm transactions etc.
    So I wonder if those debit cards of yours also double as credit cards. Also, what do Americans pay annually for debit cards (just the regular bank charge I mean, not some national figure)? And what kind of % intrest on credit cards (assuming good credit rating, average person etc.)?

  18. #18
    Quote Originally Posted by Bolson13 View Post
    So I wonder if those debit cards of yours also double as credit cards. Also, what do Americans pay annually for debit cards (just the regular bank charge I mean, not some national figure)? And what kind of % intrest on credit cards (assuming good credit rating, average person etc.)?
    It depends on your bank. Mine charges no fees if I maintain my checking balance over a certain $ amount. ATMs, on the other hand, can charge up to several dollars transaction fee to make a withdrawal (generally, ATMs branded with your own bank don't charge you, while others do), which is why I almost never use cash.

    Debit cards can double as credit cards. Most banks offer "overdraft credit" which means your debit card essentially becomes a credit card if your balance is too low. If you're at that point, however, you're already in trouble unless you keep your money in multiple accounts.

    Interest on credit cards varies wildly. Typically it's around 10-12% for people with good credit (possibly lower with exceptional credit), but can balloon up to 25% or more if you miss a payment.
    Last edited by belfpala; 2012-02-17 at 06:21 PM.

  19. #19
    Quote Originally Posted by Grogo View Post
    Well, I am confused, Canadians have told me after visiting the US, that the debit cards are rarely used and a lot of businesses do not have the option.
    Many US Banks have a partnership with one of the major Credit Card companies like Visa or Mastercard, which makes their Debit card (which has a Visa or Mastercard logo) acceptable everywhere the equivalent Credit Card would be. In order to tell, US Debit cards have a Visa or Mastercard symbol (or for whichever CC company they're partnered with).

    Basically, in the US we use Debit cards pretty frequently (though less frequently than other countries), but those cards are completely indistinguishable from Credit Cards in any way. Traditional Debit cards (requiring a PIN number instead of a signature) are generally not accepted.

    Also, many in the States prefer Credit Cards to Debit cards for security reasons. If someone gets a hold of my Credit Card and racks up some charges, I can challenge those charges and don't have to pay them any money at all. If the same happens with a Debit card, my actual money is actually spent, and will only be returned to my account after they investigate. Furthermore, if an investigation goes against you on a Debit card, the money is gone, while if it goes against you for a Credit Card, you can simply not pay them the money (and take the hit to your credit report).

  20. #20
    Quote Originally Posted by belfpala View Post
    It depends on your bank. Mine charges no fees if I maintain my checking balance over a certain $ amount. ATMs, on the other hand, can charge up to several dollars transaction fee to make a withdrawal (generally, ATMs branded with your own bank don't charge you, while others do), which is why I almost never use cash.

    Debit cards can double as credit cards. Most banks offer "overdraft credit" which means your debit card essentially becomes a credit card if your balance is too low. If you're at that point, however, you're already in trouble unless you keep your money in multiple accounts.

    Interest on credit cards varies wildly. Typically it's around 10-12% for people with good credit (possibly lower with exceptional credit), but can balloon up to 25% or more if you miss a payment.
    Okay, funny how that works. We (me) pay a small amount each year (around €10 or so I think) and pay I believe nothing or very little over every transaction at any atm (maybe not ours). Any bank that is, over all of Europe now even I think because of EU regulations. So go to spain and just use my ATM without much extra cost.

    We also have overdraft on our debit accounts so we can use an ATM when we go over the limit but I mean more like say, I go to the US or somewhere, sitting in a restaurant and they only accept a credit card. Can you then use your debit card as a credit card.
    So looking at it from a practical sense I mean. Since your cards have mastercard or visa on it they have to make money some way. Probably because they charge you at banks besides your own for using their system. But I always figured that bank charging thing was what maestro (subcompany of Mastercard I think) was for.

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