1. Credit Card vs. Debit Card
A debit card is linked to your bank account, and when you use it to make a purchase, the funds are deducted from your account. In other words, you’re spending your own money.
A credit card, on the other hand, allows you to borrow money from a lender up to a certain limit. You can use it to make purchases and then pay back the amount you borrowed (plus interest) later. Essentially, you’re taking out a loan that you’ll need to repay.
The main difference is that a debit card is linked to your own money, while a credit card allows you to borrow money that you’ll need to pay back later.
Many people who come from Europe to the U.S. spend cash and use debit cards to be financially conservative. However, they miss out on the biggest benefit of a credit card which is building your credit history so later you can borrow larger amounts to buy a car or house.
Check out our article, “Moving to the U.S.? What to do with Your Finances,” if you are planning to come Stateside. And check back again for our forthcoming article on how to build your credit history.
Want to learn more of Emmy Sobieski’s great tips on interest rates, card benefits and utilizing the reward system? Read the rest of this article within the HorseGrooms Community. All you have to do is set up a free profile in the HorseGrooms Community and you’ll gain exclusive access to special resources, opportunities, courses and more. Sign up and view the article exclusively on Community here.
This is NOT a financial, legal, tax, or investment advice.
This article is for educational purposes only. It is not advice. Why isn’t it advice? First, I don’t have the licenses necessary to advise you. Second, I don’t know your specific situation, which I would need to know in order to advise you (if I had the licenses, which I do not).
Whenever someone gives you advice, ask yourself these two questions above: do they have the credentials, and do they know your specifics? If either answer is no, treat their advice like a starting point of learning, and not as advice.
Let these blogs serve as a starting point in your education, not an end answer. Only you can find your answers to your specific situation.
I love this horse community, especially the parts that come together to celebrate the majesty and generosity of the spirit of horses. I want to provide a starting point for you to learn and empower yourself with financial knowledge, and map your perfect journey through life.
My career: 32+ years as an institutional investor, specializing in technology stocks, corporate, and startup operations. I am an advisor and investor in public companies and private companies; authored the #1 Amazon Bestselling book $100M Careers: the 5 Fastest Paths to Wealth Beyond Your Wildest Dreams; am a financial coach through my $100M Career Amplifier program; have managed multi-million and worked on multi-billion funds; and have been a keynote and guest speaker for many events and podcasts, covering everything from careers, leverage, operations, and technology.