Credit Cards vs Debit Cards

Credit cards are the most popular cards these days as they offer a convenient way to manage cash flow and making payment when you don't have the cash in your hand. There are several types of cards such as low rate and zero balance transfer offers.The main theory behind this piece of plastic is that everyone time you swipe your card, money will be borrowed form the bank and you will have a certain time period in which you will be required to pay back the borrowed amount. For the past ten years the credit card was the most popular type of bank cards.

Recent studies show that there has been a sudden and rather sharp rise in the popularity of Debit cards. A Debit card can be described as a electronic cheque book. This piece of plastic allows you to access your own bank account anytime. This means you have no debt whatsoever since it goes straight out of your account.We use this card to withdraw money or to pay for services or goods.

Now for the big question.....WHICH CARD IS BETTER?

Each card has its pro and cons and they both used differently in different situations. Have a look at the table below to further enhance your understanding of the two cards.

	Debit	Credit
Pros	Using your own money, so no temptation to get into debt and have to pay interest No annual fee	Comes with interest free days, so if you pay off in time you will not get hit with interest expense It is a loan that may help your cashflow Extra features on some premium cards, such as rewards, concierge services, free travel insurance, extended warranty.
Cons	Lack of features compared to credit cards	Features come at a cost. Most credit cards charge an annual fee When it is not used properly, may build a never ending debt

Now that you know the details, I'm going to let you decide which cards is better in which situations. Because each card will help you in different situations. 

FACT - Recent figures show that 56% percent of Visa's global card sales volume was made on debit cards compared to 44% on credit cards.

Types of Credit

There are several types of credits that will borrow in our lifetime. Such credits might be:

A home loan

Personal Loan for buying home appliances,interior deco and furniture.

Car Loan

Credit Cards

Interest Free Schemes

When borrowing credit we always need to remember the not only do we have to pay back the amount we borrowed but we also have to pay interest.

What is interest?

Interest is a fee paid by the borrower of assets to the owner as a form of compensation for the use of the assets.

Money is paid typically back as a percentage of the borrowed amount, this is usually paid over a certain time period. This percentage is known as the 'Interest Rate'. 

It is calculated by dividing the amount of interest by the amount of principal. 

For example , if a lender such as a bank charges customers $90 in a year of loan of $1000, then the interest rate would be 90/1000 which equals 9%.

Hopefully you have learned something new about credit and interest rates :)

Home Loan

Car Loan

Interest Rates

In life there are things we need and things we want. Below is a list of our daily needs and wants:

NEEDS

House/Shelter

Water - Gas- Electricity

Food

Clothes

Transport

Petrol for transport
Education

WANTS
More clothes

Jewerllery

Shoes

Bigger House

Entertainment

Someone personal wants list will always outweigh the needs list. We always need to remember that our needas are the first priority and wants come at the end. There is no point in wearing designer clothing but having a empty kitchen, where there is no food.

We all have to learn to control our wants but remember to reward yourself every now and then for sticking to spending only on needs or sticking to a budget. :)

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Money for Jam

There are heaps of ways from which children/teenagers can earn a bit oif extra cash to help them to buy things like games or music. Below are a few ways to some extra bucks :
- Umpiring or coaching children's after school sports
- Busking ( Make sure you have a busking permit)
- Household Help; bins/garden/dishes
- Weekend Market:sell your unwanted goods
- Online selling or buying:Ebay/Gumtree/Tradetang etc.
- Paperround
- Garage Sales

Hope these ideas will assist you in making some extra cash :)    Have fun :)