Financial Literacy

Teens discuss the true costs of having a credit card without knowing all the facts. 

Credit card?  Debit card? Charge card?  Which one to use? They are not all the same. Each can be used to pay for services and products, but each also has unique characteristics, so it is well worthwhile to compare products:

Credit card — Use a credit card to buy products and services and pay for them over time. But remember, buying with credit is a loan — unpaid balances ​accrue interest which, in addtion to the funds used to make a purchase, must be repaid.  Additionally, some issuers charge an annual fee for the use of their cards.

Credit card issuers may also provide “courtesy” checks to their customers which can be used in place of your card, but they’re not a gift — they’re also a loan that you must repay. And if you don’t pay your bill on time or in full when it’s due, you may be subject to additional charges — the amount you pay to use credit. The finance charge depends in part on your outstanding balance and the annual percentage rate (APR) charged by the credit card issuer.

Charge card — Charge (or store) cards may be issued by a particular merchant and are only good for purchases from that merchant. Partial monthly payments are allowed and if you do not pay the balance in full each time you get your statement, you will be assessed interest on the unpaid balance.

Debit card — This card allows you to make purchases anywhere debit cards are accepted, accessing the money in your checking or savings account electronically. Unless you have overdraft privileges, your purchases cannot exceed your checking or savings accounts balances.

These books are available from the Library: