Concept of the Month: Card Smarts

Debit and credit cards are all over the place, but do you know how to use them?  This month at Young Americans, we’re talking “Credit and Debit Smarts,” which includes the cards.  Here’s some basic information that’s helpful for our customers ages 12 to 16 who might be interested in applying for one of these cards.

Debit Cards

Debit cards are swiped like credit cards, but the money comes directly out of your checking account.   Because this money comes directly out of your checking account, it is very important to keep track of how much money you’re spending so you don’t overdraw your account.  It’s a good idea to keep track of your debit card spending in your check book register to help reduce the risk of overspending.

Credit Cards

Credit cards can be very convenient when you need to make a big purchase, or don’t have the money right then. When using a credit card, you’re borrowing money from the credit card company. The company pays for the item you purchased, and you pay the credit card company back at the end  of the month.   If you spend more of the borrowed money than you can afford to pay back, the credit card company will allow you to pay part of the bill that month, and pay the rest the next month. They will charge you interest on the remaining money owed, and interest adds up fast.  A good rule to follow when using credit cards is not to spend more than you can afford to pay back. That way you won’t owe the companies interest and you will build good credit at the same time.

Take this quiz to test how “card smart” you are.  Then be sure to come into Young Americans Bank to pick up more debit and credit activities.