Budgeting

Give Yourself Some Credit

Before you start thinking about whether you’re going to pledge an organization at college or work after graduation, let’s get all of the facts on debit versus credit and what you need to know to be prepared for the future.  

Woman with laptop and credit card

Graduation is quickly approaching and you’re gearing up for the next step. Your bags may not be packed quite yet, but you’re starting to mentally prepare yourself for what the future may hold. Before you start thinking about whether you’re going to pledge an organization at college or work after graduation, let’s get all of the facts on debit versus credit and what you need to know to be prepared for the future.  

Open a checking account with a debit card. You may already have a savings account, which is great, so the next step is to definitely open an account where you can access your money quickly and safely. Regardless of whether you’re planning on moving away from home or sticking close by, opening a checking account with a debit card is a smart move. Opening one at a credit union that is a part of the CO-OP Shared Branching Network is even better. What’s the CO-OP Shared Branching Network? It’s a group of nearly 7,000 credit unions, nationwide, who work together so that you can visit their locations to conduct your financial business, just like you were at your home branch. Another financial tidbit: go to a financial institution where the accounts are actually free. All of ASE’s checking accounts, and most of our services, are completely free.  

 By opening an ASE checking account with a debit card, you will have access to your money anywhere Visa is accepted. Just remember, you will need to keep a close eye on your account with either online banking or mobile banking to make sure you don’t spend more than what you have available. This will cause your account to go negative. When you go negative, you could be charged fees until you bring your balance back into the positive.  

What’s the difference between a credit card and a debit card? 

A credit card is a loan that you have to pay back, while a debit card is tied to your checking account, so it spends what money is already available in your account. Now, because you’re embarking into adulthood, talk to your parents about what you can do to start building up your credit score. Typically, you can’t have a credit card by yourself until you’re 21, however you can open one with a co-signer (someone who is on the loan with you) before then. If you have a credit card and use it to pay for things, and if you don’t pay your balance prior to your bill dropping in the mail, you will have to pay interest on that card. Interest is the amount that you’re charged to borrow the money.  

 Credit cards can be a blessing to your credit score, but they can also be a curse if they aren’t used wisely. Talk to your parents, and then to an ASE representative, about whether you think you should get a credit card to start building your credit score. Your credit score is an important number that will follow you for the rest of your life, and it can have an impact on your career, interest rates on future loans (car, mortgage, etc.) and more.  

 At ASE Credit Union, we are excited for you and your next step. We also want to be the financial institution you turn to when you’re opening your savings accounts, checking accounts and loans, too. Visit www.yourASEcu.com or swing by any of our locations to see why ASE is YOUR credit union! 

As an editor, copywriter, and social media manager at exploreMedia, I work to develop content that is relevant and interesting to our readers and coordinate with contributing writers.

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