Why don't banks allow more control over credit/debit card charges?
quid has expressed some of the disadvantages with this approach, but there is another. Vendors will not want to give you any goods you buy with your credit card until they are sure they will get the money. With your suggested approach buying something with a credit card now looks like: No vendor is going to stand for this for even moderate sized transactions, so in reality they will just decline your card if you have this facility enabled. Credit card fraud is an extremely (to stress, EXTREMELY) small proportion of total credit card transactions.  The card issuing entities all offer zero fraud liability, even on debit cards.  There are millions of transactions every day and fraud loss just isn't worth developing, and supporting, an additional authentication layer that faces the consumer. To be clear, the downside is cost.  Cost to develop, cost to implement, cost to maintain, cost to support.  All of this to stop something that millions of people have yet to even experience. The other answers touch on why having two-factor auth or some other additional system is not worth it compared to simple reactive systems (cancelling lost cards, reversing fraudulent charges etc), but it should also be noted that this goal can be achieved with a method similar to what you describe.  My bank (TD Canada Trust) has an app (I'm on android) that gives you a notification immediately after your card is charged (even test charges like at the gas station).  It's really simple, does not slow down authorization, and makes fraud detection super easy.  (I'm sure some other banks have similar apps). "Actually in Finland on some bank + debit/credit card + online retailer combinations you type in your card details as you normally do, but after clicking ""Buy"" you get directed to your own bank's website which asks you to authenticate yourself with online banking credentials. It also displays the amount of money and to which account it is being paid to. After authentication you get directed back to the retailer's website. Cannot say why banks in US haven't implemented this." Credit cards and debit cards make up the bulk of the transactions in the US.  Visa and Mastercard take a percentage of each credit card transaction.  For the most part, this fee it built into the price of what you buy.  That is, you don't generally pay extra at the grocery store if you use a credit card (gasoline purchases are a notable exception here.) If you were getting something like 2% of a third of all the retail transactions in the US, you'd probably not want to rock the boat too much either.  Since there is little fraud relative to the amount of money they are taking in, and it can often be detected using statistical analysis, they don't really stand to gain that much by reducing it through these methods.  Sure they can reduce the losses on the insurance they provide to the credit card consumer but they risk slowing down the money machine.  These companies want avoid doing something like reducing fraud by 0.5% revenues but causing purchases with the cards drop by 1%.  More security will be implemented as we can see with the (slow) introduction of chip cards in the US but only at a pace that will prevent disruption of the money machine.  EMV will likely cause a large drop in CC fraud at brick-and-mortar stores but won't stop it online.  You will likely see some sort of system like you describe rolled out for that eventually. This is a question with a flawed premise.  Credit cards do have two-factor authentication on transactions they consider more at risk to be fraudulent.  I've had several times when I bought something relatively expensive and unusual for me, where the CC either initially declined and sent me a text asking to confirm immediately (after which they would approve the charges), or approved but sent me a text right away asking to confirm (after which they'd automatically dispute if I told them to).  The first is legitimately what you are asking for; the second is presumably for less risky but still some risk transactions). Ultimately, the reason they don't allow it for every transaction is that not enough people would make use of it to be worth their time to implement it.  Particularly given it slows down the transaction significantly (and look at the complaints at the ~10-15 seconds extra EMV authentication takes, imagine that as a minute or more), I think you'd get a single digit percentage of people using that service. "A few years ago I had a US bank credit card that was serviced (all support, website, transaction issues) handled by FIA Card Services (part of Bank of America). I could create one-use credit card numbers, or time-limited (for example, 3 months) numbers.  I could also create (""permanent)) extra card numbers.  All of these could have a max charge value (IIRC, even a fixed value), so you could have a separate card number, with a limit, just for a subscription service or gym membership. The Bank issuing the card cancelled the entire card offering, so I lost these features. Maybe FIA still provides these features on cards they service. As a note to pjc50 (can't comment in this SE yet), Japan has had contactless cards for >10 years, but during use they tend to place them in a special tray (with the sensor underneath) during the transaction."
"I have some experience with this.  I have had fraudulent charges appear on my credit card statement and had to change my card number several times, despite (I believe) no carelessness on my part.  Every time that this has happened, I have never lost a penny due to fraud on my credit card.  The bank has ultimately removed the fraudulent charges in every instance. Given this, you'd think the consumer doesn't need to worry about this at all.  But it seems like credit card companies beg to differ. Yes, because although I have never lost a penny to fraud, the bank (or the merchant) loses money every time it happens.  The $0 liability protects you; the card security measures protect the bank. But... why should a consumer ever bother worrying about these in the first place, when he knows he legally can't be held responsible for fraudulent charges? What exactly is this new ""peace of mind"" that he supposedly gets by (say) using features like virtual account numbers that he doesn't already have? Although you shouldn't end up out any money when this happens, it is an inconvenience.  The bank will cancel your card and issue you a new number.  It may take a few days for you to receive your new card.  If you have another card to use, this isn't a big deal.  If you are out of state the day before you need to check out of a hotel and return a rental car with no backup credit card (as I have been), it is a big deal.  (In my case, I had to have the credit card company talk to the hotel to give them the new card number, and they were able to overnight me a new credit card so I could get home.  I now make sure I carry a backup credit card.) Should a consumer put any effort into worrying about this at all? (Why?) In my opinion, it makes sense to be careful what you do with your credit card number, if only to avoid the inconvenience.  Don't type your credit card number into an e-mail message, for example, and only use it on websites that you trust.  That having been said, it is not worth it to be paranoid about it, either.  No matter how careful you are, eventually you will probably use it at a store that gets hacked, or your card will get skimmed somewhere, and you'll need to get a new credit card number. The best way to protect yourself is to make sure that you go over your credit card statement each month and look for any fraudulent charges that the bank didn't catch." I tend to agree that the need for liquidity is overplayed in this day and age.  We live in a world of electronic transfers that take only a couple days at most.  With my brokerage account I can go from stock to gas in my tank via debit card in about 3 days. We're a long way away from the days when it took weeks, phone calls, and physical checks in the mail to go from stock to cash in your hand.  We've also moved a long way away from limited credit/debit card acceptance.  It was not long ago that my mechanic didn't accept credit cards.  Locksmiths didn't carry a square reader on their iPhone 10 years ago.   However, don't expect debt to always be available.  Many many many people with strong income and stellar credit histories had their credit/HELOC limits slashed from 2008-2010 while banks pared back risk.  A cash position of a size that makes sense gives you a high level of short term control; you aren't reliant on someone else's money. Liquidity isn't the main issue with emergency funds.  The main issue is psychological.  Build a foundation rather than overly optimistically chasing yield. Context clues hun. I was talking about if you go to Chilis and swipe your card for $20 and leave a $5 tip the processing amount the bank takes into account when telling you your available balance is much more likely to be $23 than $25. So the bank knows I went to Chilis the second I swipe my card, but doesnt know the exact amount. I was saying a lot of people dont understand that. They see they spent X at Chilis (processing) and assume it to be fact. I don't understand why you're having such a difficult time with this concept.   Also comparing swiping a debit card as credit to writing a check (in terms of when they show up on your account) is a terrible comparison. When a check goes through the accurate balance is taken out all at once a few days later, but when you swipe a debit card as credit a tentative balance is taken out immediately and adjusted to the actual balance when it settles.   And calling me ignorant because I don't need the help writing down where my money is at or goes is pretty ironic. "The credit card may have advantages in at least two cases: In some instances (at least in the US), a merchant will put a ""hold"" on a credit card without charging it.  This happens a lot at hotels, for example, which use the hold as collateral against damages and incidental charges.  On a credit card this temporarily reduces your credit limit but never appears on your bill.  I've never tried to do it on a debit card, but my understanding is that they either reject the debit card for this purpose or they actually make the withdrawal and then issue a refund later.  You'll actually need to account for this in your cash flow on the debit card but not on the credit card. If you get a fraudulent charge on your credit card, it impacts that account until you detect it and go through the fraud resolution process.  On a debit card, the fraudulent charge may ripple through the rest of your life.  The rent payment that you made by electronic transfer or (in the US) by check, for example, is now rejected because your bank account is short by the amount of the fraud even if you didn't use the debit card to pay it.  Eventually this will probably get sorted out, but it has potential to create a bigger mess than is necessary. Personally, I never use my debit card. I consider it too risky with no apparent benefit." "There are other good answers to the general point that the essence of what you're describing exists already, but I'd like to point out a separate flaw in your logic: Why add more complications so that ""should I call this principal or interest"" actually makes a difference? Why's the point (incentive) for this? The incentive is that using excess payments to credit payments due in the future rather than applying it to outstanding principal is more lucrative for the lender. Since it's more lucrative and there's no law against it most (all) lenders use it as the default setting." Honestly, if you're going to restrict the online payment on your card over this, you may as well just restrict it permanently. Because this is definitely not the only time anyone has had an opportunity to retrieve the information on your card. There isn't really that much information on there - anyone taking more than a cursory look could in theory remember it and use it. We're talking waiters and checkout chicks, anytime you've given your card to anyone really. Banks know this. Credit card numbers are not really secure. They factor this in. And they  have software for fraud detection - looking at large or unusual transactions and transactions in foreign countries etc. Of course it's not fool proof, but the best thing you can do isn't to cripple your card, but just be a little bit more diligent about checking your statements, making sure the transactions make sense. Some banks also allow you to set up an alert system so anytime any transactions occur you are notified immediately. Because it makes money for all parties, and because the general public is reluctant to any change. Who should have an interest to change that? People. And they have no say in it. You can actually do a lot without paper checks nowadays (I only use one per year for car taxes, as they do not accept anything else), but many people shake their heads about even online banking and would never trust it. They do. The $260 already accounts for fees, I just left that out as I didn't believe it necessary info for the question of how to solve for group B.   Edit : Oh, you mean accounting for the 1.5% interchange for group A? Yeah, I didn't do that. For group A we weren't given a number for monthly spend but we were told that they carry an average monthly balance of $3000.