Comparison: Credit Cards vs Debit Cards for Kids and Teens
This video does a credit card vs debit card comparison in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about the advantages and disadvantages of each, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- Differences between credit cards and debit cards
- Difference in the fees charged by them
- Which is better: a credit card and a debit card
Is there any difference between a credit card and a debit card?
Yes, there are a couple of differences.
Well then, what are they?
And also, with credit cards, you have to pay interest if you don’t make your payments in full for the month, or you don’t make your payments at all. But with debit cards, since the money is coming from your own account, you will not have to pay any interest.
Is there a difference in the fees that they charge?
Yes. With credit cards, many of them will have an annual fee.
But with debit cards – most of them do not.
Are there any other differences?
Yes, there are.
With credit cards – well, at least with most of them – you can earn rewards (points, miles or cash back) that can be redeemed for cash or goodies. But with debit cards, usually you do not earn any points or other form of rewards.
Which is better: a credit card and a debit card?
You talked to me about all the differences, but which is better?
Well, if you’re disciplined and you make your monthly payments for the credit card – and make them in full – then credit cards are probably better for you, because you also get free credit and you can get rewards.
But if you don’t think that you’ll be able to make your monthly payment in full, and you don’t think you’re that disciplined, then a debit card is better for you.
Thank you very much for telling me the difference between a credit card and debit card, Wall Street Willy.
You’re welcome, Sooper Cooper. Remember, finance is your friend!