Credit Cards

Using a debit card is very equivalent to using cash; rather than withdrawing money from your account ahead of time and paying for your purchases at the time of transaction, you are electronically transferring your money from your account to the merchant at the time of transaction. This relieves the user from carrying cash, which actually has a much higher likelihood of being lost, stolen or misused.

Credit cards, however, work by borrowing money from the bank at the time of purchase. You pay back the bank for these purchases at a later date, such as when your monthly statement arrives. You can choose to either pay it all at once, or you can make minimum payments until you have covered your costs.

When used responsibly, credit cards have many benefits and are  very important financial tools in achieving your financial goals. Simply put, there will come a time in every person’s life when they just do not have the means to make a payment in “cash,” and therefore must rely on borrowing from the bank. When that time comes, your credit history will prove to the banks that you are responsible enough to qualify for a mortgage or loan. Surprisingly, no credit history is just as detrimental as bad credit history! The best way to combat this situation is to open a Magnolia State Bank credit card and responsibly manage your credit, building strong credit history and gaining rewards in the process.