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When should I get a credit card/debit card? Whats the difference?

A confused high school student :')

Thank you comment icon Hello, it would be best to have a debit card (tied to a checking account) when you are in high school and receiving income, maybe from a summer job. This will allow you to organize and create a budget from the income being received at an early age. I wouldn't advise getting a credit card until you have confidence and self control to live within your means. However, credit cards are good to start build credit. I obtained a credit card in college to start building credit. I got a small balance card ($750 balance) which made it easy to manage at the start. Evan C. Evan C.
Thank you comment icon Get a credit card at your own convenience! The younger you get one, the more time you have to built a great credit. Don't put too much on your credit card, pay on time, and you will start building that credit! Troy Morin
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Subject: Career question for you

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Danielle’s Answer

A debit card is tied to your bank account. It allows you to spend your actual money. A credit card is borrowed money. You will be spending the bank's money and paying it back with interest added. Banks often send credit card offers to college age students. This can be a trap. I strongly suggest a debit card and saying no to all credit cards until after college. I hope this helps.
Thank you comment icon This is very helpful, thank you! Anita S.
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Meghan’s Answer

Hi there! This is a great question. To start let's go through the major difference between the two cards:

Debit Card: Is a card directly linked to your bank account. Think of it as the equivalent of cash! You can use it to spend the money available in your account without facing interest.

Credit Card: With a credit card you are spending money that is not yours. They come with annual fees, very high interest rates, and flashy introductory offers. With a credit card you spend the banks money, and then need to pay it back with your own money (plus interest!). Since you are borrowing from the bank, you can begin to build credit (credit score). Building credit is beneficial if you're able to pay the bank back on time, and can hurt you a lot if you don't pay the bank on time. Having a good credit score will allow you to take out loans from banks in the future, for cars and houses etc. The best way to have good credit is to always pay the full balance on your credit card each month. Never miss a payment as it could hurt your credit!

Starting out, a debit card allows you to get used to spending with a card. It can be easy to overspend with a card because you don't see the physical cash exchanging hands. It's good practice to budget yourself as carrying around all your cash can be impractical/unsafe. When you are comfortable that you can handle spending using a debit card, a credit card can be useful in the long term due to the ability to build credit. To build good credit, try to only use a credit card for small purchases and set up automatic payments from your bank account.



Thank you comment icon This is great! Thanks so much :) Anita S.
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John’s Answer

Anita the fundamental difference between a debit card and a credit card account is where the cards pull the money. A debit card takes it from your banking account, debit cards make it more difficult to overspend since you're limited to only the amount available in your checking account. With a credit card, you run the risk of spending beyond your means. Just because your credit limit is $1,000 doesn't mean you can afford that sort of spending in your monthly budget. Credit cards are potentially dangerous, especially for a high school student who who didn't mention if they had a job.

Any time you borrow money, you’re creating debt. The more you borrow, without repaying, the deeper you go into debt. If you have the wrong attitude about credit cards, it could be easy to borrow more than you can afford to pay back. A credit limit should be thought of as a loan extended to you by a credit card provider as opposed to free money to spend. Credit card balances generally come with interest rates. Every time you add to your balance and don’t pay it off in full within the billing cycle, you’ll have to pay that much more in interest. This can make it difficult to get out of credit card debt. Once you’re in debt, reaching your other financial goals is much harder. Debt leads to a myriad of other problems, and not all of them are financial. It can lead to stress, depression, and other health issues, all of which can have serious impacts on saving for college.

Hope this is helpful Anita
Thank you comment icon This is perfect, thank you! Anita S.
Thank you comment icon Thank You Meghan. Among the things we can give and still keep are our word, a smile, and a grateful heart. John Frick
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Raisa Anan’s Answer

Hi Anita! There are some well-detailed and helpful answers here. I'll just add a note that, before you start using debit and/or credit cards, do extensive research on the pros and cons. Then decide if that is what you need and when you might need.
Thank you comment icon Sounds good, thank you! Anita S.
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Gurpreet’s Answer, CareerVillage.org Team

The other answers have already addressed the differences between the two but I wanted to chime in and say that I opened up a credit + debit card when I got first job during my senior year of high school. Although I did not start using my credit card until well after college, I am very grateful that I opened it up at an early age. A big part of your credit score is the length of your credit history meaning how long has your oldest credit card been open. Even though I never used my credit card until later, I set myself up for success because on paper, I had a long credit history!
Thank you comment icon Thank you so much, Gurpreet! Anita S.
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Robert’s Answer

Generally I recommend avoiding both until you can plan and manage a proper budget. If you can’t afford it, don’t buy it. Learn how to create assets, thing that will produce income, and minimize liabilities, the things that cost you with no return.
Thank you comment icon Sounds good, thank you! Anita S.
Thank you comment icon Hello, it would be best to have a debit card (tied to a checking account) when you are in high school and receiving income, maybe from a summer job. This will allow you to organize and create a budget from the income being received at an early age. I wouldn't advise getting a credit card until you have confidence and self control to live within your means. However, credit cards are good to start build credit. I obtained a credit card in college to start building credit. I got a small balance card ($750 balance) which made it easy to manage at the start. Evan C.
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Ira’s Answer

So, great question. But, when it comes to spending, I would say paying with cash is usually the best approach. But, there are times when it makes financial sense to use a credit card, as long as one handles her/his credit responsibly and one pays off your bills, balance in full and on time each month.
Thank you comment icon I am really grateful you took the time to answer this question. Anita S.
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Angela’s Answer

Hello! If you're in high school or even early adulthood, it's best to have only a debit card. If you have a job, your employer can send your paychecks directly to your bank (debit card). Banks also have the ability to have a savings account as well. You can set up automatic payments and you'll start to see your savings go up! I would not get a credit card until you're significantly more responsible, understand how to budget and are further along in your career. I hope this helps!
Thank you comment icon This is perfect. Thank you! Anita S.
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