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!