How to choose Debit vs Credit cards 💳 Personal Finance

Socratica Presents SMART MONEY
Many people are embarrassed that they aren't great with money. We believe it's never to late to learn! We're all about Lifelong Learning here at Socratica, and we are here to help you increase your Financial Literacy.
The theme of SMART MONEY is making informed choices.

In this video, we discuss your two big options for making purchases other than using cash: Debit or Credit. What's the smart choice, here?
First, we'll make clear what each of these options are. A debit card offers you access to your own money. It's in an electronic form, so you can buy things online, unlike with cash. Meanwhile, a credit card is essentially a loan—with very bad terms if you don't pay your bill in full at the end of the month.
There are advantages and disadvantages to both. There's far less risk of going into debt when you use your debit card. But using a credit card is a convenient way to make those big purchases you need (like computers, appliances for your home, plane tickets) without having to have that much cash money on hand immediately. You can also build your credit when you use your credit card.
But there's a big downside to credit cards. If you can't pay off your credit card in full, you'll be charged interest based on the balance due. And that's a fast way to get into debt.
To avoid any issues with either, we end the video with some tips on how to use these tools responsibly.

𝙅𝙪𝙢𝙥 𝙩𝙤 𝙩𝙝𝙚 𝙙𝙞𝙛𝙛𝙚𝙧𝙚𝙣𝙩 𝙩𝙤𝙥𝙞𝙘𝙨 𝙝𝙚𝙧𝙚:
0:00 Buying concert tickets online
0:36 What is a Debit Card?
1:25 What is a Credit Card?
2:29 Key Differences
3:21 Spending Limits
4:21 Credit Score Impacts
5:16 Debit Card Advantages
5:42 Debit Card Disadvantages
6:19 Credt Card Advantages
6:51 Credit Card Disadvantages
7:34 How do you pick which to use?
8:33 Tips for Smart Use of debit & credit

𝙒𝘼𝙏𝘾𝙃 𝙉𝙀𝙓𝙏:

𝙒𝙀 𝙍𝙀𝘾𝙊𝙈𝙈𝙀𝙉𝘿:
Wealth Made Easy (advice from Millionaires & Billionaires)

Budget Planner & Monthly Bill Organizer

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Written and Produced by Kimberly Hatch Harrison and Michael Lee Harrison
Edited by Megi Shuke

#personalfinance #debitcard #creditcard

[Socratica]

Channel Members see this video first! 💜🦉
We want to hear from you, Socratica Friends: How do you decide whether to use credit or debit?

[floydmaseda]

If you're a responsible spender (i.e. don't spend more than you make) and you're using a debit card regularly, you are leaving free money on the table. The minimum amount of cash back you should be getting from each purchase is 1.5%, and many cards have categories of spending with 5% or higher cash back. As long as you pay your balance off in full each month and stick to cards with no annual fees, you can pull in several hundred dollars a year in literal free money. That's not like a life changing amount or anything, but it is more than the zero that you get using a debit card all the time!

[emman]

You forgot to cover credit card billing cycles and due dates. Another downside of credit cards is keeping track of these new dates and periods. Setting autopay can help with this in addition to manually paying it off yourself. You should have mentioned 0% 1st year APR cards that can basically save some people from insolvency by giving them an interest free loan for a year. This is very useful for people who will earn more money within a year vs what they do now. Examples are students, people switching jobs, etc. Overall, great video. 👍

[vadimuha]

30% on a credit card loan? Where the hell do you live? I have 3.5% after grace period

[iamjimgroth]

In Sweden banks generally determine your credit worthiness by your income, and use credit history to make sure even that is acceptable.

[MrFilip]

I don't have credit and never did. Only company credit card but not personal.

[Unhomiee]

You can set it up such that the credit card autopays the balance at the end of every statement cycle. As long as you're not dumb with your spending habits, you enjoy all the cashback with zero downside.

All my transactions are via credit card, and I get $16 in cashback every month from my 800 bucks of monthly expenses.

[loam]

To me it's simple: I justify credits only for buying house or car. For any other things you better think 100 times and consult with friends, family, or experienced people if you wanna use credit, because anyways you need to give it back and with added percents.
So, debit of course.

[kirbymarchbarcena]

If something so cheap, I'd rather go paying in cash.

[vadimuha]

You can also deposit your own money on a credit card and pay with that money + loan if needed

[cx]

Use both debit & credit cards. Not paid even one penny of interest in years.
Credit cards (2) get zeroed out every week and will ONLY carry a balance in an emergency!
Debit card I use is a prepaid card, preload it with about $100 and that gets me to the restaurant, grocery store & other stores.
Can & have preloaded it with more if I know in advance if more is needed. After using it, check the balance and slide in more cash to it.
PLUS it pays interest in crypto (selected bitcoin) on my charges. That debit card can be preloaded with crypto instead of cash and at the point of sale they convert it to dollars with no fee.
Plus #2, because its a preloaded card, if I loose it or it gets stolen the best they could get is about $100 EVEN IF I'm forced to surrender the pin.