> This applies to so much of the financial system, that it baffles me people worry about the things they do.
That's easy to understand. For the "financial system", $1000 is nothing. For many people, $1000 means the difference between having something to eat or not. Even if you get your money back in the end, not having any money for several days can be a disaster; and the 1% chance that you might not get that back can be too much risk to bear.
> I have family members that are so scared of card skimming they only pay in cash
That's understandable. With cash, all you can lose is the cash you have in hand at that moment; if your card is skimmed and used without your permission, you can lose up to the card's limit (and perhaps even more, if the limit isn't strictly enforced). You might say that fraudulent transactions will be reversed, but there's always that 1% chance that the other side will somehow manage to convince your bank that the transactions were in fact legitimate.
> and friends who are still too scared of the internet to buy things online.
When you buy at a store, the goods you bought are in your physical possession at the moment of the payment. When you buy things online, the goods you bought show up days or even weeks later, if they do, and until they arrive, you have no idea whether they're actually what you bought (and that's on top of the "card skimming" risk).
Sure, if you have enough resources, you can tolerate losing $1000 of the limit of one of your credit cards for a few days until the charge is reversed (and even, in the worst case, absorb the loss in case that charge isn't reversed), but not everyone can do that. And the perceived risk can be higher than the unknowable real risk; someone who has heard about (or experienced) enough incidents in which money was lost (temporarily or not) will understandably be more reluctant to expose themselves to these risks.
That's easy to understand. For the "financial system", $1000 is nothing. For many people, $1000 means the difference between having something to eat or not. Even if you get your money back in the end, not having any money for several days can be a disaster; and the 1% chance that you might not get that back can be too much risk to bear.
> I have family members that are so scared of card skimming they only pay in cash
That's understandable. With cash, all you can lose is the cash you have in hand at that moment; if your card is skimmed and used without your permission, you can lose up to the card's limit (and perhaps even more, if the limit isn't strictly enforced). You might say that fraudulent transactions will be reversed, but there's always that 1% chance that the other side will somehow manage to convince your bank that the transactions were in fact legitimate.
> and friends who are still too scared of the internet to buy things online.
When you buy at a store, the goods you bought are in your physical possession at the moment of the payment. When you buy things online, the goods you bought show up days or even weeks later, if they do, and until they arrive, you have no idea whether they're actually what you bought (and that's on top of the "card skimming" risk).
Sure, if you have enough resources, you can tolerate losing $1000 of the limit of one of your credit cards for a few days until the charge is reversed (and even, in the worst case, absorb the loss in case that charge isn't reversed), but not everyone can do that. And the perceived risk can be higher than the unknowable real risk; someone who has heard about (or experienced) enough incidents in which money was lost (temporarily or not) will understandably be more reluctant to expose themselves to these risks.