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Is a Credit Card Really Better Than a Debit Card? - YouTube
Channel: The Rachel Cruze Show
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- Hey guys, welcome to another episode
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of The Rachel Cruze Show.
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Okay, on here we talk a lot
about not having credit cards
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but having a debit card.
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And there's a big
difference between the two,
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but some people are
like, "Oh yeah, Rachel,
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but if I just have a
debit card, X, Y and Z,"
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or "A debit card doesn't do X, Y and Z
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that a credit card does."
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So let's just break it down.
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Let's compare the difference
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between a debit card and a credit card.
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All right, we'll go super basic first.
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A debit card is attached
to your bank account,
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so when you swipe a debit card,
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you're using your money.
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It's coming out of your
checking account, okay?
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It's linked.
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When you swipe a credit card
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you basically are just using debt.
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It's all it is.
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So you're borrowing money from
the bank for that purchase,
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and then you pay the bank back
whenever your bill is due.
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So the difference is using your money
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versus the bank's money.
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Now your debit card will
probably have a logo
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like Visa or Mastercard in the corner.
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So when you run your debit card
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and you click the debit option,
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you type in your pin.
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Do, do, do. I almost said my pin out loud.
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That would've been really bad.
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You type in your pin, and then it's done.
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So the transaction goes from the merchant
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to your bank, and there it is.
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Now, the thing is, if
you run it as a credit,
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you're not running it as-
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You're running it as a credit card,
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but it's not a credit card.
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It is a debit card.
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So when you run it as a credit,
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what happens is you sign your name,
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and what ends up happening is,
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it goes from your merchant
to the credit card company.
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So again, Visa or
Mastercard, they actually
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they actually do the
transaction of the purchase
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and then it goes to your bank.
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So if something happens in
the middle of all of that
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Visa or Mastercard, whatever
logo's at the bottom
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of your card, you have
full protection of them.
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So actually when I have my debit card
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I always run it as a credit.
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I rarely type in my pin number.
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I usually run it as a
credit, and you'll end up
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signing your name when you do that option,
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but it's the safest option,
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so I love that.
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Now, there are a lot of reasons
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that people are still holding
onto their credit cards
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and they refuse to get them up.
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But if you need to lose weight,
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you don't keep a bunch of
cookies and junk food in house,
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do you? No.
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You know I need to eat healthy,
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so you're gonna have
healthy food in the house.
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Now, if you wanna do
better with your money,
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I would say get rid of the credit cards.
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When you just don't even
have the option to use them,
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that's gonna help you.
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It's the first big step.
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So here are the most
common perceived benefits
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that I hear people use
their credit card for,
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but we'll talk about the real truth.
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So one benefit is better fraud protection
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if you use a credit card
versus a debit card.
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Well the truth is, again,
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you get the exact same fraud protection.
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You get the exact same level
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of protection with your debit card
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as you do on your credit card.
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Visa even says this on their own website.
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If your card is lost, stolen,
or there's any kind of fraud,
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you will get that money back.
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Now, identity theft, it is on the rise,
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and thieves are after more
than just your money okay.
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They're gonna be after your
Social Security number,
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medical files and tax statements.
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All of these are so valuable
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when someone wants to steal your identity.
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And many times you won't even realize
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that your information has been compromised
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until it's too late.
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Seriously, it's not a matter of if,
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usually, it's a matter of
when your identity is stolen,
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which stinks that this is
the life we're living in,
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but it is true.
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So be sure to protect yourself
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with Zander ID Theft Solutions.
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They provide proactive monitoring
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and alerts, 24/7 customer service,
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and, best of all,
they're super affordable.
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Starting at less than $7 a month.
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If your identity is compromised,
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they'll do all the legwork for you
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to get everything back on track.
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That is so worth it, you guys.
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That's such a headache when that happens,
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and to have a company
just take care of it,
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it's a dream.
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So just go to zander.com
and click ID Theft.
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Okay.
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The next perceived benefit that I hear
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about credit card use is of course
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the points and the cash back.
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But the truth is, studies show
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that you will spend more when
you spend with a credit card.
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So all the cash back you're getting,
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you probably could have saved
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or more without using that credit card.
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And they're giving you all
this cash back and rewards,
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because guess what?
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They are making so much money off
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of people who are not paying their bills,
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and they're paying all this interest.
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So like all the "free"
stuff that you're getting,
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it's because other people
are not doing it. Okay?
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And then if you're not paying
your bill off every month,
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then you're paying
interest that accumulates.
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I mean, it's just, it's crazy.
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So again, I'm not gonna play that game
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with a credit card company.
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No, I'll save my money,
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I'll be in control of it.
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And I'm not gonna take
advantage of other people
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not doing well with their money
to get all the free stuff.
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So I don't wanna play the game.
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I'm out.
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Now, the bonus is that
some debit cards now
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actually are gonna offer rewards.
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Make sure to stay on budget,
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but when it's a debit card,
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and, mentally, you're in
totally different mind space
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versus a credit card.
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All right, somebody will
talk about the benefit
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of having a credit card is
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all the travel perks that you get.
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But the truth is, trillions with a T,
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not a B or an M, a T,
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trillions of airline miles
go unused every year.
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Isn't that crazy?
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Especially last year, when
there was no travel going on.
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So you went and charged up
your credit card thinking,
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"I'm gonna travel the world,"
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and then it was like, nope. Pandemic.
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You're staying home.
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You're Like, "Oh, man."
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Yeah, that's what happens.
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Life happens.
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So like I said before,
credit card companies
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are not just giving you
everything for free.
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They're doing it because
they're making so much money
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off of you in the long run.
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All right, you guys,
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hopefully I cleared up
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some rumors and confusion
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from the difference between
credit cards and debit cards.
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But again, just get rid
of the credit card, okay.
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Have a debit card,
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and then learn to take
control of your money
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and create a life you love.
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