Learning Debits & Credits

Video Transcript

"Hi so you are wondering the difference between debit, credit card or a debit card versus a standard credit card. No problem I'll be able to answer that question for you. My name is Adriel Torres and I'm the owner of ultimate credit today dot com. Credit cards are based on credit. A lender will give you a credit card based on your credit report. Lets say you have a credit card for five thousand dollars it is based on credit. It is not based on how much money you have in your bank account. You can draw against it, you can do, you can purchase things up to the high credit limit. Or you can even take out cash at the atms up to the high credit. Now the debit card works like a credit card, it's taken just like it and in every place just like a credit card except the difference is that it's tied to your checking account or business account or your personal account so the money that you are charging has to be in your account. That's the only way it's going to work. If you are buying a five hundred dollar item but you only have three hundred dollars in your checking account it's not going to work. If you have a credit card that you have a five thousand high credit on you only owe a thousand dollars, then it will work because you still have another four thousand dollars before you can get to the high credit and not be able to charge any more. So one is tied to your checking and business personal accounts and the other one is just based on credit. And that's the difference between a debit and a credit. My name is Adriel Torres and I'm the owner of ultimate credit today dot com. Thank you very much."