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I’m going to give you 3 reasons why I never buy things using a debit card, never have, and most likely never will.
Most people typically have two types of cards in their wallets, a credit card, and a debit card.
If you use a debit card to withdraw cash from your bank’s ATM, that’s perfectly fine.
However, this video is going to touch on 3 reasons Why cash or credit cards are the superior option to using a debit card.
1. You can’t build credit using a debit card
2. Credit cards have significantly better consumer protection
3. You can’t earn rewards, points, or cash back using a debit card
Watch the entire video to understand my full thought process on these three reasons.
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⏰ Timestamps ⏰:
0:00 – Intro
0:31 – REASON 1
1:50 – REASON 2
4:14 – KUDOS SPOT
5:47 – REASON 3
7:31 – MY THOUGHTS
8:59 – LOL
ABOUT ME 👇
My mission is to provide my viewers with actionable content that enables them to create financial wealth. My videos reflect my real-world experience as a real estate investor, stock market investor, student of finance, and entrepreneur.
This channel allows me to share my passion for personal finance, stock market investing, real estate investing, and entrepreneurship. I produce content that I would want to watch, and because of that, I give 100% effort to every video that I make. I also believe in complete transparency and open communication with my audience.
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.
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Hey everybody welcome back to whiteboard Finance my name is Marco and I'm here to Help you master your money and build Your wealth in today's video I'm going To give you three reasons why I never Buy things using a debit card never have And most likely never will most people Typically have two types of cards in Their wallet one being a credit card and The other being a debit card if you're Using a debit card to withdraw cash from Your bank's ATM that's perfectly fine However this video is going to touch on Three reasons why cash or credit cards Or the superior option to using a debit Card stay tuned number one is pretty Obvious you can't build credit using a Debit card when you use a debit card you Are using your own cash when you do this You're obviously not building credit Because you aren't borrowing money from Anyone on the surface this seems like a Good thing but as I've been saying for Years on this channel if you use your Credit card for purchases that you're Already going to make anyway and you're Able to pay these purchases off just Like cash but you're also gaining the Benefit of building your credit score And your credit history uh supposed to Be a clock the more you use your credit Cards not only are you gaining rewards And discounts for things that you would Have bought anyway you are also building
A credit history and increasing your Credit score at the same time as long as You're not missing those payments and Better yet not incurring any interest if You only use a debit card this entire Time you would have no credit history Which could cost you tens of thousands Of dollars when applying for loans such As a mortgage or potentially financing a Car I'm not saying that you should build Credit just to go into debt I'm saying That shaving a few percentage points off Your mortgage over the course of 15 to 30 years could save you tens of Thousands of dollars in interest if you Want to play around with the math check Out my home affordability spreadsheet in The description below this will show you Exactly how much interest you will pay Over the course of your mortgage using Different interest rates number two is That credit cards simply have better Consumer protection than debit cards People love to argue that debit cards Offer just as much consumer protection As credit cards but this simply isn't The truth I'm not even talking about Perks like travel insurance rental car Insurance and many other benefits that Come with credit cards I'm simply Talking about lost or stolen cards take A look at this table from the FTC which Shows you why this isn't true if you Report your card lost before someone
Uses it well with a debit card you Aren't responsible for any charges you Didn't authorize same with a debit card Okay cool but what if you find out that You report your car is lost after Someone has already used it with the Credit card the maximum you might be Responsible for is fifty dollars with an ATM or a debit card what you're Responsible for depends on how quickly You reported it I'll dive into this more Here in the next table let's take a look At a scenario where if your account Number is used but your card isn't lost Or stolen with the credit card you Aren't responsible for any charges you Didn't authorize but with the debit card You aren't responsible for any charges You didn't authorize only if you report The loss within 60 calendar days after Your statement is sent to you yes 60 Days is a long time and it gives you Plenty of time to figure out if your Number has been compromised or not but Some people simply just don't look at Smaller transactions or they don't go Through their statements with a Fine-tooth comb when reviewing all their Financial transactions this may cause You to miss signs that your card is even Compromised in the first place if you go Past 60 days then you are responsible For the loss entirely this isn't even a Possibility with a credit card so let's
Break down these numbers in the next Table here if you report your debit card Lost or stolen before any unauthorized Changes are made you owe zero dollars That's great within two business days Your maximum loss is fifty dollars That's still pretty good more than two Business days but within 60 calendar Days after your statement is sent to you Your maximum loss is 500 and what we Just mentioned is if you don't catch This within 60 calendar days you are 100 Responsible for the loss whatever that Amount may be so these are just some Instances of lost or stolen cards credit Cards offer things like lost or stolen Possessions that were just then your Credit card within a certain time frame Fraud protection trip cancellation Benefits and many others that debit Cards simply don't offer if you want to Find out the full benefit of your credit Cards check out a word from today's Sponsor which is Kudos Kudos is a smart Wallet browser extension that works on Both Chrome desktop and Safari mobile it Helps the average users save over 750 Dollars per year by picking the card That maximizes credit card rewards and Hidden card benefits like purchase Protection and travel insurance at Checkout users just need to pick the Cards they have from the 3 000 cards That Kudos supports no card numbers are
Required getting started is simple just Click on the link in the description Below and add the Kudos Chrome or Safari Extension to your device you then choose What credit cards you have pin kudos to Your browser extensions and start Maximizing your credit card benefits and Rewards for users who also choose to Store their card numbers with Kudos Kudos also streamlines the purchasing Experience with a secure and seamless Autofill experience that works on over 1 Million sites on desktop and mobile Devices Kudos uses the same bank level 256-bit encryption used by all major Banks Kudos has also a card Explorer Tool that lets you discover new cards That fill gaps in your wallet based on How you spend Kudos is currently us only And is giving a 10 Amazon gift card Towards holiday or Christmas shopping For us users who sign up before December 25th using my link in the description Below enter the code Marco underscore Holiday during the onboarding process And make your first autofill purchase Using Kudos a 10 Amazon gift card will Be delivered to the email address you Sign up with within 72 hours of your First autofill purchase using Kudos use Kudos to start earning and saving more With your credit card today number three Is very simple rewards points and cash Back credit cards are able to give back
Rewards points and cash along with many Other perks and benefits because they Generate a lot of money from their Customers this is where the the Inevitable Dave Ramsey fan will get in The comments section and say do you Really think you're smarter than the Credit card companies Marco to which I'll respond uh no I'm smarter than the Financially undisciplined people who Make them all their money this is Similar to the bear analogy you have to Only outrun the bear you don't have to Be faster than the bear you just have to Outrun the slowest person okay so the Bear is the credit card company by the Way take a look at this chart right here To understand how credit card companies Make their money the credit card Industry generated 176 billion dollars in 2020 alone 76 Billion of this was from interest 51 Billion was from Merchant fees 17 Billion was from cash advance fees and The rest you can see in the chart if you Want to pause the video and take a look At this you can use your debit card a Thousand times a month but you won't get Rewarded for it again you're simply Using your own cash so why would there Be any incentive for the lending Institution to give you points for using Your own money that makes no sense the Only reward for using a debit card or
Cash is that you won't have any debt if You're completely debt averse credit Cards most likely aren't for you but if You can make the mental switch that your Credit card should be used just like Cash and you should pay it off every Billing cycle without incurring a penny Of Interest then you are the type of Person a credit card is safe for if you Find yourself buying things just to buy Them and you think that you're beating The system by getting rewards points Then you are going to be ultimately the Loser and you're going to be helping me Fund my trip to Europe using my credit Card points that I have accrued Responsibly make sense okay so as always I end these videos with my thoughts at The end so number one is know your limit If you know you're someone that's going To go crazy if you have a credit card I Highly recommend sticking with either Cash or a debit card personally I don't Even feel comfortable carrying a debit Card around in my wallet the only reason I have it is to make withdrawals from ATMs whether I'm running errands during The day or I'm you know somewhere Overseas for example where I absolutely Need the cash number two is don't miss Payments if you do decide to go the Credit card route this is a no brainer I've never paid a penny in interest and Credit card interest in my life I don't
Plan on doing it I treat them like cash Only use them for purchases that you Already make even though I feel like I've beaten that point to a pulp now Number three is pay your balances in Full if you don't pay your balances in Full you most likely can't afford the Things that you're buying in the first Place and you're just using these things Just to blindly swipe and buy stuff that You want if you know what you're buying If you have a you know somewhat of a Rough budget every month a credit card Should be no problem to you again the Only reason I don't use these debit Cards is because I feel like the Protection is lacking and I feel like It's a direct link to a thief or you Know scammer or whoever and my checking Account so I just don't feel comfortable Carrying them I do but you know I wish It wasn't there at the end of the day so I hope you got value from this video let Me know your thoughts below about how You feel about debit cards and using Them versus like a credit card or cash For example thank you so much for Watching and have a prosperous day do You you really think you're smarter than The credit card company Marco Yes