Is credit card fraud really a big problem (for consumers I'm asking, not banks or merchants)? In my experience, chargebacks are pretty easy, debit or credit. Same with reporting a lost or stolen card and voiding any purchase made on it. And every credit card I've ever had has been remarkably proactive about alerting me to possible fraudulent activity.
There's also an issue of anonymity and trust. There are plenty of websites from which I'd like to make purchases (some of an unflattering disposition) that may continue to bill after cancellation requests (because they know nobody would take them to court for fear of having their names associated) or that I just don't want bound to my name.
How many times have you found yourself shying away from a site because you were worried about what they'd do with your credit card number? This isn't a perfect solution (especially with the limited pool of numbers), but it's nice.
Last month my Visa debit card was cloned at an ATM and several hundred dollars were withdrawn. It happened on a Friday and my bank had to cancel my card leaving me without access to any funds. It took about five days to get a new card created and shipped to me.
If I had a local bank it wouldn't have been much of a problem as I would have been able to withdraw funds in person. I agree that chargebacks are pretty easy but in my experience the card itself had to be canceled and reprinted causing an inconvenience. Luckily I have credit cards for emergencies such as this.
All things considered it wasn't a huge deal to me personally but I could see how fraud could potentially be quite the problem for some.
Edit: To add, I also needed to print out, sign, and fax an affidavit form for my bank along with a scan of the card itself to prove it was still in my possession.
When banks have to pay millions of dollars a month in credit card fraud, it impacts consumers. And there is peace of mind that there is no POSSIBLE way your card can be used for fraud.
You're tempting the gods when you say "no possible way." Recent history has shown repeatedly that when it comes to hacking especially access to funds, defenses are good for only short periods of time.
It's one of those things you never really think about until it happens to you.
It happened to me but I got lucky with my CU's fraud detection (froze the card after 2 hours), but took about 8 hours of my time to sort out. Now when I'm at that random liquor store on the corner I tend to ask myself, "Could this be another compromised card reader?"
