Cash versus Credit
You know that you can use money to buy things you really want or need. But sometimes, instead of paying with cash, you might see adults paying with a credit card.
What’s
the difference between cash and credit cards?
Cash
is Money You’ve Already Earned
You
earned the money in your piggy bank or in your savings account. That money belongs to you. When you pay with
cash, you’re using money that you have today.
Adults
Borrow Money with Credit Cards
Some
adults use credit cards to borrow money to pay for things. Usually, they do
this when they don’t have enough money saved up to buy the item, but they need
or want it right now. Let’s say that the roof leaks, and the family
doesn’t have enough money to get the roof fixed. But the roof needs to be fixed
right away.
If
your parents use a credit card to fix the roof, they’re really borrowing money
from a credit union or a business. If they don't pay the money back quickly, they will
have to pay the credit union or business extra money. When credit unions or businesses lend people money, they charge people for that money!.
Smart
people pay that money back as soon as they can. Until they pay back the money they owe, they don’t
spend on anything “extra.” The sooner that people pay off the money they
borrowed, the less “extra” money they owe the bank.
Credit Cards give you lots of advantages
A safe alternative to cash
Builds a good credit history
Bails you out of emergencies
Gives you time to pay
Credit Cards give you lots of advantages
A safe alternative to cash
Builds a good credit history
Bails you out of emergencies
Gives you time to pay
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