Read this before you start using Bank Card

You are advised to stop keeping money in your wallet at home as there is no security. The solution you are given is to use the bank. When you arrive at the bank, you will meet the types of accounts called Savings account or Checking Account. Before you settle down to understand them, you are told again that there are 3 types of cards, Credit Card, Debit Card, Prepaid Card.

What do these words mean?

Savings Account Vs Checking Account

Checking Account

The big difference between Checking and Savings Account is how you get interest (profit) and how you can withdraw the money in your account. If you use a checking account, you can withdraw your money whenever you want.

You can withdraw money through an ATM, Service Providers Window in the bank, Using a Debit Card or Using a Check. You can withdraw money or make transactions as often as you can with a checking account, only if there is enough money in your account.

Savings Account

Savings Account His story is different. It is possible to withdraw your money through an ATM or at the window inside the bank. Also, with some banks, you can transfer money from savings account to checking account by using the relevant bank’s app (Mobile banking).

When you use a Savings Account there is no Check. So the methods you can use to withdraw your money are ATM, local window or transfer to the app (if the bank has this option). Also, most Savings Accounts do not allow more than 10 transactions per month.

On the Savings account side, each bank has its own procedures and often these procedures change. So it is better to ask questions before you open an account and deposit your money.

Savings account has many restrictions in withdrawing money, but it is beneficial if you leave your money in the bank for a long time. This is because savings accounts have interest that increases money according to the amount you have and the time you leave money in the bank.

It’s not money that can make you rich, but it can cover small monthly needs like vouchers, or subscription services like Netflix and Spotify. Checking accounts if they have interest then they are very small compared to Savings Account.

Prepaid Card Vs Debit Card Vs Credit Card

Every time a person opens a bank account, he is given a card that he will use to withdraw money from his account through ATM machines.

ATM Card

When you open a bank card account you are given an ATM Card. ATM card is different from Debit and Credit Cards. ATM card is a card that you use to withdraw money only at the ATM. You cannot do transactions outside the ATM itself. I mean like making payments by bank card like places to eat.

You may ask why the types of cards you usually see are VISA and MASTERCARD. This is not a type of card. Visa and Mastercard are two companies that provide payment systems. Like Paypal or Swahili.

Prepaid Cards

These are cards that you can use to make transactions in places that accept payment by bank cards or even buy things online. The prepaid card is not linked to any of your bank accounts, neither checking nor savings accounts.

To make a payment with a Prepaid card, you must have deposited money in the card. And that is why it is called (Pre)paid card. You can use it like a bank account because you can save and deposit money from anywhere.

Debit Cards

These are bank cards that allow you to withdraw money from ATMs and make transactions online, but the money comes from your bank account. That is, they come from the Checking Account linked to the Debit Card.

Credit Card

This does everything that a Debit Card does, but its biggest difference with a Debit Card is that when you spend money, it doesn’t come out of your account. In that sense, the Credit Card imposes a debt that you will pay later, at the end of the month.

That is the biggest difference between Debit Card and Credit Card, there are many things that these cards are compatible with. All models have protection against fraud (fraud) as well as any indication of fraud. You can also file a lawsuit if you see any unclear transactions on the card.

Advantages of Credit Cards

Now if you leave that the Credit Card does not give money to your account, it also comes with other benefits that banks often do not mention. Although not every bank has these.

For example, there are some banks, if you use their credit cards a lot in different countries, they give you a gift like paying for a hotel in the country you prefer to go to. There are some credit cards that have Cash Back rewards.

Cash Back means that you get money back based on your usage. That is, every time you make transactions with your Credit Card, there is a small amount of money that comes back to you as a gift. To get these rewards you must be paying your debt on time every month.

A credit card is useful only if you use it regularly and pay off existing debt. A credit card allows you to carry this month’s debt to the next month. This is called Balance. But I don’t advise you to keep a balance on your credit. There is interest that will increase every month.

At the end of the day, you will find yourself only paying your credit card debt. Because the small amount of money you earn will be going to pay the debt that is increasing so that you can continue using your credit card.

Consider These Before You Start Using a Credit Card

Things to consider when you decide to stop using a Debit Card and Start using a Credit Card are 2. We are talking more about the Credit Card because if used correctly it has more benefits than the Debit Card which uses the money in your account.

Do not accept to carry this month’s debt into the next month. As I said that the debt if you leave it increases every month, depending on the interest percentage of your credit card.

Use a credit card to pay for things that are in your daily or necessary needs. Example for buyers of supermarket products like Shoppers. When you go to buy the daily necessities, use your credit card. Credit cards are not for one-time pleasures.

IMPORTANT: Before you make any decisions, ask the bank people to give you the relevant account or card procedures in writing and read it yourself. It is important to know how you deposit money, how to give it and how the money will increase or the monthly account charges will be deducted.

Why do I say procedures in the text?

There are some things bankers don’t say because they are beneficial to the respective bank or there is a bonus for the employee who registers you with the relevant service. Along with that, any part that involves money transactions, do your best to study its procedures well.

I am NOT your financial advisor. Do what you do at your own discretion. Follow your financial advisor first to educate you more. He will tell you if it is worth it or not.

Also learn how to protect your money, to avoid having your savings stolen.