so I've ran a lot of surveys on this channel regarding whether you guys use
debit cards credit cards or even cash for your most common purchases and what
the results are showing is that you guys typically use your debit cards for
purchases and that's why I'm making this video for you today
so in this video I'm gonna explain why I never use debit cards to make purchases
unless I absolutely have to and why I typically use credit cards for all of my
purchases just because it makes more sense but don't worry if you do use
debit cards because I'm not gonna totally diss on them because there are
actually pros and cons when it comes to credit cards and debit cards but for the
most part it just makes more sense to use a credit card if you're not paying
any credit card interest if you just found this channel I'm Jason with honest
finance and I make a lot of videos on different topics that will give your
life and your finances more valuable so if you guys are interested in that type
of content feel free and subscribing or you can just continue on with your life
and just watch this one particular video on why I don't use debit cards so let's
get right into it okay so I'll start off talking about the good things about
debit cards and then I'll move into the negative stuff so that you can see with
a little more clarity why I prefer to use credit cards for all of my purchases
now one of the best reasons for using a debit card is because it's linked
directly to your checking account so what this means is that every single
time you make a transaction with your debit card it's gonna show up instantly
on your statement balance so that you know exactly what's going on inside your
checking account right when you actually make a purchase and then another cool
thing about debit cards is if you ever need cash back then I would definitely
use a debit card because you can do this at grocery stores gas stations all over
the place and you can always get cash back and it's super easy to just take it
out get cash right from your checking account now on the flip side credit card
transactions do post on their account the same day but they're never going to
be fully posted for about three days while they pend and so sometimes that
can get a little bit confusing and then if you ever do need cash back from a
credit card I would never do that because it's called a cash advance and
you're actually going to be charged interest every single day you use it
which is something that I would not recommend doing and then keep in mind
whenever you're using a debit card the transactions are actually being deducted
from your account which makes a lot more sense from a budgeting point of view
because when you're using a credit card the transactions actually go up on your
balance and it can confuse people a lot because you're not seeing it
a direct reflected sense like you do from your debit card in your checking
account and seriously if you do carry a credit card balance where you're paying
interest every month then disregard everything I'm about to say because in
that context I still want you to use your debit card for everything because
it is not worth taking any of this advice if you're paying interest on your
credit card now the way that you can tell if you're paying interest on your
credit card is just check your statement balance and see if you have any line
items that say that you've paid any interest charges because if you have
then that means you are paying interest on it now the other way you can tell is
if you just know for yourself that you don't pay off your statement balance in
full and I know this can get a little bit confusing so I am gonna link up a
couple videos up here on credit cards so you can learn more about it if you want
to but the point I'm trying to make is that if you are paying any interest on
your credit card then disregard what I'm about to say now these are the reasons
why I prefer to use credit cards for all of my purchases versus debit cards and
this is why it's going to make sense for you guys now the first reason why I use
credit cards for all of my purchases is because they are way more protected than
debit card purchases so if you ever need to reverse a charge it's a lot easier to
do that with a credit card than with a debit card so for example a few years
back I was staying in New York City at a hotel and the problem is is that the
hotel actually charged me for two rooms when I only needed one room and so when
I actually disputed the charges with them they refused to settle it with me
so all I did was I just called up Visa who is the credit card that I used at
the hotel and then they helped me get the charges reversed so that I didn't
have to pay for a room that I didn't book now I'm not saying that debit cards
won't help you in those types of situations but the thing is is that with
a credit card it's always in their best interest to keep you as their customer
and they're always gonna do as much as they possibly can to help you whereas
with a debit card you just don't have as much protection credit cards also give
you extended warranties on your purchases and they also protect your
purchases against theft and damage which is something that debit cards never do
they also have all the reward points and signup bonuses too so if you're going to
be spending money anyway then you might as well just get the reward points that
you do with a credit card now I have seen a lot of debit cards that actually
do have rewards programs but you have to look for them and do a little bit of
research to find them but they do exist out there it's just a
easier to find them with credit cards because it seems like every single
credit card out there has a rewards program because at the end of the day if
you're gonna have to pay your utility bill regardless then you might as well
just get reward points for using your credit card because you're gonna have to
pay it anyways and then if you travel internationally credit cards are
actually very useful to use because a lot of them aren't gonna charge you
foreign transaction fees and what this means is that if you're buying stuff
outside of the country then they're not gonna charge you to convert the currency
whenever you make a transaction and that is very convenient and if you guys are
still watching this video can you please just give it a thumbs up so that I can
tell how many people are liking it versus not liking it and then I know if
I'm gonna make more content like this thank you very much and another thing to
keep in mind with credit cards is that their websites are extremely robust so
if you're in a budgeting and stuff like that then credit cards are very very
good because they obviously have a lot of money to fund their websites and they
make them extremely intuitive to figure out your budget and where your spending
is and all that kind of stuff whereas with a lot of debit cards if you're
using a local bank or a small little credit union you're never gonna have
that type of a website and they're never gonna be as good as what you get from
credit cards and then the last thing on credit cards is that they actually carry
an important role in your credit score which is something that debit cards
definitely don't do but I wish it wasn't true but it is and it's just the fact
that you do need a credit card in order to help your credit score out in some
sense because basically your credit cards control about 30 percent of your
credit score through what's called credit utilization and this all just has
to do with how much you're spending versus what your limits are and this can
get a little bit techie so if you guys want to learn more about your
utilization score I'll leave a video up here but the point is is that credit
cards do help your credit score and debit cards don't and just remember that
credit cards don't charge you a penny and interest unless you're not paying
your statement balance off in full so as long as you're paying off that statement
balance you're never gonna have to pay a penny in interest and you don't have to
be afraid of credit cards but if you feel like you're the type of person
that's not going to be able to control your spending through a credit card then
definitely just stick with what works I just want what's best for you guys and
in my context I like to use credit cards because they're better than debit cards
in some ways but if you're not going to be able to control your spending and
you're gonna be spending money on interest then definitely just stick with
a debt card now once again I'm Jason with
honest finance and I make a lot of videos on different topics that will
give your life and your finances more value so definitely subscribe if you
guys are into that type of content but for now if you guys just want to watch
some more credit card videos I'll link them up up here and that's all for now