Credit or Debit Cards. Which is Best?

Many people get a credit card because in our modern way of life it has become an “essential” for buying over the internet, booking flights, booking tickets for concerts, reserving hotels etc, without having to have cash on you or having to send a cheque. Many people do not realise that there is such a thing as a “debit card” which can be used to buy things on the internet, book flights, hotels etc, but you are using your own money. As soon as the purchase is done, the money comes directly out of your own bank account. The bank usually charges you a reasonable monthly fee for this. The advantage of having a debit card instead of a credit card is that it tends to protect you from over spending, because when your account is empty and you try to put a purchase on your card it will come up “declined”. This could help protect you from making poor financial decisions today with will affect you in the future

For a short time people can actually spend more than they earn. They can only do this by using credit cards and getting loans to buy things they can't afford to pay cash for. Buying things on credit has become so easy, and because New Zealanders in general seem to have developed an inability to practice the concept of delayed gratification, people find themselves in serious debt very quickly. They find themselves so deep in debt that the only solution has been to file for bankruptcy. Teach kids to avoid credit cards and use debit cards instead. If they learn to spend and save according to a well thought-out spending and savings plan, you give them an important advantage after they leave home.

Sylvia’s first book called “Parents – how to stop your kids from going broke” can be bought by contacting Silbo Systems