Saturday, August 29, 2015

Going Dutch: Financial Fitness Message of the Week (30)

Have you ever heard the myth that credit cards are safer than debit cards? Let’s dispel that right now. More often then not debit cards come with a Visa or MasterCard logo making them usable as either a debit card or a credit card. Along with these functions they also come with the same security features that a credit card would have, as well as the ability for the extra security of pin based transactions (check with your financial institution, and if necessary… get a new financial institution).

Now I know what you are going to say, “But if I don’t have a credit card I won’t be able to fly, rent a car, or get a hotel room!” This is another myth that we’ve been taught. When reserving or paying for these items online, debit cards function the same exact way as a credit card does except that they debit cash from an actual account instead of borrowing imaginary money on a computer screen (more on that at a later date). The only problem you may encounter is when you are actually at the rental counter. I had this happen a couple years ago at an airport in Columbus, OH. I had reserved my rental car online but when I got to the rental counter the clerk gave me a hard time about using a debit card. I tried to explain that it had a VISA logo and functioned the exact same way as a credit card but to no avail. It was at that time that I realized that I still had a couple options, I could either pull out a credit card and be disciplined enough to pay off the full balance when I received the statement, or I could walk 10 feet down the terminal to their competitor who would accept the debit card. Don’t let society talk you into thinking that you MUST be in debt, it is just not true.
PRINCIPLE 30: Debit cards are better than credit cards for many people, and cash is even better.*
As long as you are following biblical financial principles, you will be able to wisely manage your debit card. The key is to pay for things right now. Pay as you go. Don’t borrow money and violate a principle of Scripture just because of the convenience factor.
Credit marketing firms have also tried to convince our society that we should give credit cards to kids, the younger the better, so they can learn to use debt. This is another very harmful myth. Most youth simply learn to spend, spend, spend – leaving the adults to pick up the pieces and setting up a pattern of financial destruction that will haunt them the rest of their lives. This is the exact opposite of teaching them good financial fitness.

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