Do you know the difference between a debit and a credit card? A surprising number of young adults don’t.
According to a 2016 study done by LendEdu, 43% of college students couldn’t explain at least one difference between a debit and credit card. Although the survey was small, only 455 students, that’s still a high number.
Thanks to Worldpay, formerly Vantiv, students who participate in Young AmeriTowne or International Towne gain hands-on experience about the difference between debit and credit cards. International Towne participants receive a credit card, which they can use to pay for goods and services in Towne. Using credit is particularly convenient because students don’t have to exchange money when they shop in a foreign country. In Young AmeriTowne, 5th graders use a debit card to make purchases, and the funds are automatically withdrawn from their checking account.
When I asked 10-year-old Rehoboth, an Accountant working in the AmeriTowne Snack Shop, about the difference between a debit and credit card, he responded right away. “A credit card uses money from the bank, and you have to pay it back later,” he said. “A debit card takes money from your checking account.” Rehoboth added that four shoppers had already used their Worldpay debit card to purchase snacks.
Young Americans Center for Financial Education is grateful for partners like Worldpay that prepare young people to be financially responsible adults someday. Maybe Rehoboth can teach those college students a thing or two!