When I talk about credit vs. debit, I’m not speaking about the retail/revolving line of credit cards, we’re discussing the debit card purchases or PIN based transactions vs. using your bank card like a credit card for signature-based transactions. The question was asked, “is one better than the other?” My response, although rather vague at the time was “it depends”. The person sitting across from me then edged me on…”depends on what?!” So, I put my pen down and sat back in my chair then looked over my glasses at her earnestly and said, “whether you have money in your bank account at the time of the transaction for it to be declined or approved.” The young lady was still looking confused, so I decided to break it down a bit more for the sake of additional questions (I was in a hurry to complete an assignment).
“If you use your PIN, the terminal uses your current collected balance to determine if there is sufficient funds available to approve the purchase. In the event you don’t have enough money to cover the transaction or purchase amount, then using credit to sign for your items, is a way to save you the embarrassment of being declined at the time of check out. That is, if you have set up the ‘debit card overdraft coverage’ option with your bank. (something I would not advocate, unless it’s a case of I have no money to by food for me and my children).”
I could tell that my young friend still wasn’t getting it so I turned around in my swivel chair, got up and walked towards my bookshelf, searched for Journey Into Finance by E.N. Towner, flipped through the pages of Chapter 1 found what I was looking for and handed her the book. “Read Chapter 1, and if you have any further questions, call me to set up an appointment to discuss them.” That was how I earned my first paying client. We set up a counseling session for every other Saturday in the morning. I called our session “Banking: Getting on Track”, which can be purchased for a limited time at a ridiculously low price of $25.00.
Update- while running some errands today, I stopped to pick up a few groceries at Walmart. The lady in line ahead of me was attempting to use her debit card as a credit card and was told by the cashier that they no longer allow a debit card to be used as credit. The lady was confused as she began searching for a credit card to use instead of her debit card. The cashier said, “they’re starting to do this so that people can’t take a stolen debit card to purchase large ticket items”.
*Feeling a bit cynical about corporate America- I thought to myself, serves them right. Turning good workers away (cashiers) who request to see some identification, would normally prevent these type of thefts just to save money to invest in programmed machines instead!* Whoa, it’s time to head home and do some meditating ’cause I’m feeling some kinda way today. Somebody had to say it, I’m just keeping it real. Short, sweet (kind of), and packed with information.
After some complaining from customers, the terminal owners offered merchants the convenience of a non- PIN based option for their purchases. Now if you pay attention, you’ll see the option of NO PIN. This is especially helpful for credit cards and can work with the debit cards as well for signature based purchases.
That’s all for now. Thanks for reading, until next time…like, share, and/or comment.
Wishing you peace and prosperity,
Video Posted on Updated on
There’s more to life than what we’ve been told. Oh yes! Enlightenment is knowing that what we know is only a small fraction of the truth of our existence. I know now that the more I learn- the more I need to LEARN!
Check out this video and let me know your thoughts:
No one is perfect, we are all “works in progress”. That is why I work on myself-improvement and encourage others to do the same. If this is my break-down, then let it begin so I can awaken renewed and transformed like the Butterfly!
“In light of recent market volatility, remember that your retirement plan is intended for long-term investment. Attempts to time the market are rarely successful. One way to manage risk over time is to ensure you have a diversified portfolio that is re-balanced through up-and-down markets. Keep your individual needs, goals and time horizon in mind and consult with your financial adviser if needed. It is important to note diversification and re-balancing do not ensure a profit and do not protect against loss in declining markets”.- JPMorgan Chase Investment Council
A retirement plan is not a sprint folks- it’s a marathon. There will be some declines, but the most important thing is to remember to stick to the plan and not panic! I know, it’s easier said than done, but trust me, things will change – it always does. Understand your risk tolerance. Money is just another source of energy- do not let your emotions take over when the markets drop. Research indicates that over time, it will rise again. When markets drop is the time to invest or not! That’s your choice but whatever you do- please remember that your broker doesn’t have control over the economy, so go easy and review your portfolio to see where adjustments can and should be made. My two cents? Ride it out and keep your eyes on the “end game”.
You know me by now- I like to keep it informational and short and sweet.
Until next time…
Peace and prosperity,