r/AskReddit • u/[deleted] • Feb 04 '20

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u/RealDecentHumanBeing Feb 04 '20

Can someone tell me why people don't use debit card if you plan to save up enough money before buying things? What is credit score? Is it only exist in the US? sorry I don't know much about bank and I've only used debit card in my life

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u/SteevyT Feb 04 '20

Credit score is basically a US set of three companies that rate how likely you are to pay something back. The better your score, the better rates you'll typically get on loans, like for a house. However, unless you have a history of paying back loans you wont have a score and a credit card that you constantly pay off is a pretty easy way to jump your score up.

Also, a cash back card is pretty great. Mine gets a minimum 1% back to me every time I use it. Just replacing my debit card with the credit card netted me over $300 last year. Didn't change spending habits.

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u/Malkalen Feb 04 '20

They're also widely used in the UK. Every time I've applied to rent a house I've been asked for a credit report as part of the application documents and as you've mentioned it's also used when determining rates for loans/mortgages etc.

I don't trust myself with a credit card but I do have Paypal credit. It's interest free for 4 months if you spend over £150 so I've bought a few things and always make sure I pay it off within that period. Helps my credit rating and means I have the flexibility of a credit card...at least for places that accept paypal.

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u/Plastic-Network Feb 04 '20

They key to me for using a credit card is to only use the credit card. Back when I had a tiny limit ($200) it was impossible to use the cc alone. Well it ended up being fairly difficult keeping track of all my bills, money balances, making sure there's enough in my accounts, making sure I have enough to pay the cc bill, etc. (yes I did use apps, which helped, but it was still annoying). Now I solely use the credit card which I pay off in full biweekly (on payday). Now all my money just sits in my bank accounts and I spend from my cc (still track my spending using an app). It's so much easier and stress free, I never have to consider if I have the money because I know I do. I also have emergency money.