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

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!