Debit Card vs Credit Card - What Banks Don't Want YOU to Know

what's up my friends i'm bob i'm back again  with another video today we're talking about   the difference between a debit card and a credit  card and what banks don't really want you to know   stay tuned! in this video i want to share a couple  things i want to share the difference of course   between a debit and a credit card but they're  really important things that you need to know   about there is a way that you can apply a free  tool that i'm going to share with you at the end   of this video and be able to pay off your credit  cards in full every single month and take massive   advantage of the cash back rewards benefits so  be sure to stick with me through the entire video   we're going to share some really cool things today  let's talk about the basics okay debit card credit   card there's not a whole lot to really get into  the fact is a debit card is kind of like cash but   it pulls the balance directly out of your checking  or savings account let's say for example you go   over to a store you purchase something on your  debit card as soon as you swipe that debit card   it is pulling money out of either your checking  or your savings account whatever account is tied   to that debit card now with a credit card the big  difference would be that you have a credit line   and that credit line does not get pulled  directly out of your bank account you can use   your credit card for whatever item or service  but you don't have that money get pulled out of   your account which means you have to pay it later  that's where people get tripped up and they find   themselves in credit card debt something that we  want to avoid so while that's a primary difference   between a debit card and a credit card uh the  similarity is a debit card does offer you the   same type of protections as a credit card so for  example you have the ability to have a fraud alert   and fraud protection on a debit card as well as  the ability in some cases to dispute any charges   that might come in that look a little weird  which of course from that perspective a debit   card is certainly a lot better than using cash  to pay for things because cash could simply just   get lost there's two schools of thought as i see  it you have the dave Ramsey group right which   i have been a dave Ramsey follower for many years  but the dave Ramsey group says avoid credit cards   like the plague they're going to bite you they're  going to get you they're going to ruin your life   you're going to go into debt then you have people  that say wait a second i'm going to take advantage   of credit cards to get travel rewards benefits do  you know that there are people that are traveling   all over the world as a result of just using  their credit card for their everyday purchases and   let me show you a really cool example i have an  american express cash back rewards card so i get   cash back when i use my american express card and  look at this i have pending rewards dollars of 87   and 84 cents that i can cash out right now and  even better yet look what's pending what's coming   next month is 78.37 now that might seem like a lot  but really what i'm doing is i'm using my card for   my everyday purchases we're talking groceries  gas things that i gotta buy anyway and all i'm   doing is i pay it off every month and then i can  take advantage of those cash back rewards so i'm   essentially saving myself some money or of course  if you're a big traveler you can take that you can   apply it toward flights cruises or anything in  between becomes kind of super cool here's where   we get all tripped up did you know according to  lendingtree.com 42 of americans during quarter 2   of 2020 carried a balance on their credit card  month over month that means 32 percent paid it   off every month and 26 had a card but never really  used it which means they probably use their debit   card the problem with doing that is if you are  going to carry a balance on your credit card the   credit cards are going to charge you an interest  payment which means that you're taking your amount   of money that you have and you're paying more  money just to carry a balance on your credit card   that's not what we want to do we want to be  able to pay it off in full every single month   i'm going to walk you through exactly how i do  that guaranteed without fail god forbid if we   get laid off or something bad happens where our  income stops coming in because we did this little   trick we're still able to pay off the credit  card in full without fail there's three key   principles though when it comes down to saying  we're gonna ditch the debit card number one is   that we're never going to carry a balance on the  credit card at all month over month we're going to   pay it off exactly every single month number two  is we're only going to use the credit card for   items and services that we already have in our  monthly budget like i mentioned earlier you got   groceries you get gas and good things like that  that's what we're focused on and number three   we're gonna use the simple tool that i'm gonna  walk you through today and i'm gonna include it   down below in the description underneath the stuff  that i recommend there'll be a link click on it   and you can download this and follow along with me  on how to use this simple tool to be able to pay   off your credit card every single month and take  advantage of those cash back rewards i shared with   you or those trips that you always wanted to save  up for so if you're ready to check out this tool   and be able to download it all i ask a simple  charge simple price tap that like button down   below this video it helps the video it helps this  channel i certainly appreciate when you do that so   give me a like that's all i ask and i'm going to  give you this transaction register absolutely free   okay so let's hop over to the transaction register  i'm gonna walk you through it step by step   okay so once you open this transaction register  using the link down below in the description this   is what you're gonna get and this is what's cool  because this right here column g is automatically   calculated within excel don't ever touch anything  except for the green balance right here at the   top this is going to be your opening balance  that you're going to use for your everyday   transactions so let's say for example i'm actually  going to change this to one thousand dollars and   you'll notice that the balance throughout  will automatically update right there we go   now here's what i do to make sure that i'm  taking advantage of the credit cards and   to the point i shared earlier how i'm able to earn  anywhere from 50 to 70 to 80 a month with my cash   back rewards on my credit card so in my budget  i'm gonna have a couple things that go under this   number column i'm gonna i'm gonna detail them out  right here i use d and that is for deposits so   anytime i get paid i use d dc is when you would  use a debit card but we're going to slightly   out rule that because we don't want to use that  anymore ap is an automatic payment so if you   do have anything that comes out of your bank  account automatically that's what i use the ap   for and then for credit cards there's two things  you could use you could use cc and that would   indicate credit card or in my case what i do is  i use amex because everything that i use for my   cashback rewards is an amex credit card so i just  type in amex under number just to make it easier   there we go okay so let's start with some basic  all right so what we're going to do here is we're   going to do a simple deposit of 11 20 21 and  we're going to say it's our normal paycheck   okay whatever you want to put as your description  and then under deposit we're going to put 100 so   obviously you don't make a whole lot of money  but it's okay we're gonna budget the sound anyway   so here's your first budget item you're gonna  go to work and because you're going to work you   need to get some gas and stop by a gas station  but instead of using the debit card as you have   in the past you're going to use your american  express card or whatever credit card you prefer   and then that's how you're purchasing the gas the  end of the day or whenever you want come back to   your transaction register go on to the app of  either the credit card or go onto the website   of the credit card look at what it says because it  should have a pending charge from that gas company   and plug it in to the transaction register here  we go so i'm going to type in mx because that's   what i used let's say i got gas on 1 321 and  this is going to be called gas from i don't know   where are we getting gas from guys these days  i'll just say uh yeah geez i don't know shell   shell's a good gas station i guess and then  this is where you're gonna put the payment   and let's say you spent 65 on gas for whatever  reason gas is that expensive watch what happens   here it's going to automatically update your  balance from this point forward boom look at   that 1035 automatically updated now what's cool  is that actually is your bank account right so   even though you haven't paid off your credit card  yet you're making it kind of like a pretend pay on   a credit card and that way you know how much is  actually in your account for everyday spending   then i'm going to say we have an automatic payment  on 1 421 and let's just say that is your typical   mortgage payment and that's going to be in the  total of eight hundred dollars and again boom   it updates everything from that point forward  so you can continue to go through here and   plug in whatever you want so i'm going to say  another normal paycheck this time we made 200   and you can see it upgrades there and then  we're going to use our amex payment again   and this time we're going to get some  groceries from your favorite grocery store   and let's say our groceries were a total of  200 so there we go now at the end of the month   when you get your statement from american express  or a city card or whatever credit card you have   pull that up and we're going to balance our  checkbook so how you balance the checkbook   is you go on to your credit card statement so  let's say for example your credit card statement   comes up and it's saying on one four you have a  i'm sorry on one three you have your shell gas   and it's an amount of 65 dollars well that  matches perfectly and then one for your   grocery bill and that's 200 okay everything  looks great so what i do is i go through here   and i can filter this out if i want to and  only select everything that's on my amex only   and then i can see okay well here's that and then  in this little column column e you see the little   x i'm putting an x right here for guess from shell  as well as the groceries because that balanced   correctly with my current american express  statement once the statement is done and i   have additional charges so let's let me give you  an example of that let's say for example i have   an amex on 2 5 21 for some groceries that were  100 that's actually not on my american express   January statement so i'm not going to put an x on  that yet i'll just leave that alone then what i do   is i look through all of this i make sure that  my current bank account matches my deposit my   automatic payment as well as my second deposit  and then once everything is perfect for the month   i'm going to then take my current statement  balance on the american express card or the credit   card and pay it off in full because i balanced  it with my transaction register to the exact t of   everything that was on that statement i will know  that i'm paying it off in full and that i already   have the cash because i've been pretending  that it was debiting out of my bank account   all throughout the month and then i continue to  use this transaction register as we go on in life   and i constantly every time i get a new statement  from my credit card balance the statement to my   transaction register pay it off in full rinse  and repeat rinse and repeat so there's a link   down below in the description go get yourself  that transaction register i hope it is helpful   it's something i've used now for many years and it  keeps me responsible for my everyday credit card   purchases and then i hope this helped you as well  to be able to take advantage of the credit card   benefits without going into debt but having  a guaranteed way to pay off your credit cards   because you're treating it as a debit card  or as cash as the month goes along if it was   helpful make sure you tap that like button for  me and comment below let me know any questions   you have and also what did you find most helpful  in today's video i would love to know also be   sure to check out the video i'll include it on  the end screen coming up here in just a moment   two how you can raise your credit score and guess  what by the way using this transaction register   can indeed help you raise your credit score up  because you're going to take advantage of paying   off that credit card in full every single month  which gives you the benefit of having lower credit   utilization and great payment history which  definitely impacts your credit score so check   out that video i'll link it at the end of this  video but until next time and as always continue   to live your suite life because you're worth it  have an awesome day and we'll see you next time!

Channel: Bob Sharpe

Views: 228,194

Rating: 4.9209919 out of 5

Keywords: debit card, credit card, debit card vs credit card, credit card vs debit card, what is debit card, what is credit card, credit cards, how to use credit card, debit cards vs credit cards, debit vs credit card, difference between debit card and credit card, debit cards, credit cards explained, are credit cards good, debit cards explained, ask sebby, graham stephan, credit card fees, credit card debt, dave ramsey, what credit card is best for me, credit cards for beginners

Id: LymFHTByMJs

Length: 11min 38sec (698 seconds)

Published: Tue Jan 05 2021