Questions about debit cards and credit?

Question

I'm a college student, not bad with money at all (in fact, I tend to be too cheap) . I wanted to get a credit card so that I would be able to start building some credit, but then I realized that the debit card I was given with my Chase checking account also works as a credit card.

so, my questions: what's the deal with debit cards that also act as credit cards?

Do I need to get a credit card as well to start getting credit?

When I choose credit or debit at a store, what am I choosing between? As far as I can tell, it has the same effect.

I'm aware that credit is kind of bad news, but I'd also like to be able to rent an apartment, or get a cell phone without a $250 deposit (both things that have been tricky in the past without credit).

Answer 1

Debit cards do not act as Credit cards. When a debit card is used the funds are automatically taken out of your checking account. When you use your debit card and choose CREDIT, you simply avoid entering your pin and have to sign a receipt, if choose DEBIT then you enter your pin. BUT AT THE END, the funds are withdrawn from your checking.

Now a credit card has a line of credit and you are mainly BORROWING money from a creditor. Each time you make a purchase on a credit card, the creditor (the bank who issued the card) pays whatever you buy then you pay back the creditor.

If you want to build credit, I recommend getting ONE card and only charging something that you KNOW you can pay back in a short period of time. Never making late payments or exceeding your credit limit as that will b a negative mark on your credit report. And never apply for too many credit cards per banks will see that as a risk....

Answer 2

Debit cards make an immediate withdrawal from your banking account and can be used anywhere credit cards are accepted. The good thing about debit cards is that you can never spend more money than the funds available in your bank account. The bad thing is that are unlikely to help you improve your credit. When starting off, choose a credit card with no annual fee and a low APR. Once you receive a card, ask the issuer to set your limit at $500 or $1000 so you won't overspend. As you learn or express good self-control, gradually raise your credit limit, which will ultimately improve your credit score.

Answer 3

Stay away from credit cards. As soon as you use them you are in debt until its paid. If something comes up and you cant pay it off. Then your that much farther behind next month. Once you get behind in the credit card game its hard to get out of the game. High interest rates that they can raise for any reason. Outrageous late fees and over the limit fees. Not to mention identity theft.
READ THE FINE PRINT.

Pay as you go (debit card) and live on less than you make and you will have money.

Of course the bankers and their loyal followers are gonnna tell you different.

Debt free is the way to be!

Answer 4

Be careful with credit cards those companies are out to keep you paying them. They do help with your credit rating but only use them if you know you can pay them off within 28 days so you won't have an interest charge. A debit/ credit card from your banking account will not improve your credit rating.

Answer 5

You should talk to your bank about getting a credit card. When you do get that credit card, use it but only charge what you can afford to pay in full each month. That way you will build a good payment history and avoid paying interest and going into debt.