Understanding Credit Cards and Debit Cards

Hey guys, welcome back to another video.
My name is Shaun and in today’s video we’re gonna be discussing credit cards
and debit cards. Also stick around to the end because there’s gonna be a joke at
the end and I want you to tell me if you understand it. Everything you need to
know about the joke in order to understand it will be in this video, so
pay close attention. Let’s not waste any time let’s jump right in.
Now this video is another suggested video by one of my whatsapp group
members. Sied from Somalia says difference between credit card, debit
card, MasterCard, and Visa card and how they are used in the world. Here in
Somalia a few people know and use credit card and debit card but that’s very
rare to be honest. So I’m confused with them! Help me out. First let’s discuss the
definition of a credit card. A credit card is a small plastic card issued by a
bank or business allowing the holder to purchase goods or services on credit. hmmmm
but what is credit? Credit is the ability of a customer to obtain goods or
services before payment based on trust that the payment will be made in the
future. So basically you use this card to purchase something and you’ll pay the
bank or company back later with interest. What !?!?
What’s interest? Interest is extra money you have to pay back to the lender on
top of what was charged. So let’s say the lender charges 15%. You bought something
for $100. You have to pay the lender back $115. Now I’m not a financial adviser so I’m not going to get into the monthly payments, the
minimum payment, and interest rates. I’m just giving you a basic idea of how they
work. And just for your information the two largest credit card companies are
MasterCard and Visa. Now what about debit cards? What is a
debit card? A debit card is a card issued by a bank allowing the holder to make a
purchase and have the money deducted from their bank account. These are very
convenient and eliminate the need to carry money around. The bank also charges
a monthly fee to use these cards but again I’m not gonna get into the monthly
charges or percentages. I am just giving you a basic idea of how they work. So, to
sum it up, a credit card is money that’s not yours but that you pay back later
with interest and a debit card is your money but you also pay a monthly charge
for it. Let’s move on to how they are used and what you’ll see when using them.
I went out and took a few videos to show you how to use these cards. When at the
POS machine, POS stands for point-of-sale, credit
cards and debit cards are used the exact same way with one exception. When you use
credit cards you typically have to sign your name on the receipt for the store
to keep for their records. Take a look at this card, it doesn’t matter if it’s a
debit card or a credit card. They all have three payment options. Tap, Insert,
and Swipe. Now let’s start with the most convenient way. Tap. Tap option is
available to cards that have the NFC chip embedded on them. NFC stands for
near field communication. To use the tap option you simply tap or wave the card
over the POS system and it reads the card and charges either your debit card
or your credit card depending on what card you’re using. Just take a look at
this video that I took and I am tapping. I Tap the card on the screen and it charged my
card. Next is the insert option. Again another chip embedded into the
card and it’s called EMV. EMV stands for Europay MasterCard Visa. To use this
option there is a slot at the bottom of the machine that you insert your card into.
The card stays in that slot during the whole transaction until you’re done
making the payment. Be sure to remove your card when you’re done. Don’t forget
your card and the oldest option of the three is the Swipe option. On the back of
your card there is a magnetic strip or magnetic stripe. It’s also known as a magstrip. Now if you’re one of those people that pronounced it strip,
be aware strip has a second meaning. The other meaning of strip is to take off
all your clothes. Be careful using that word. To use this
option you quickly swipe the card through the POS machine. It can be a
little bit confusing which way the black strip is supposed to be facing. Is it
supposed to be facing that way? Is it supposed to be facing that way? Is it
supposed to be facing that way? is it supposed to be facing that way? Depends
on the machine, just take a look at these videos here. I am swiping with the mag
strip down and I’m also swiping with the magstrip facing that way. Now that
you know the different options for paying, what about the screen? What are
you gonna see on the screen. Just watch this video, with Tap you don’t have to
worry about anything. It’s just Tap. Payments done. Don’t have
to do anything with the screen. You’ll see stuff like please wait, sending,
receiving, processing, transaction complete, thank you. Of course they’re
gonna thank you for you giving them your money. But with the Insert and the Swipe
option, you have to confirm the amount. This is usually done by pressing the
green button. Also known as the okay button. Then you have to select what type
of account you want the money to come out of. Banks will offer you a chequing (checking)
account and a savings account. These are shortened to CHQ and SAV. I’m
not sure what type of bank accounts they have in the UK but I’m sure my buddy
Gino will comment below and let us all know. By the way guys, if you’re not
already following Gino’s channel. I’ll leave a link to his channel below. It’s
called Real Everyday English and it’s a great channel learning was from. It’s
always good to learn English from other Youtubers with different accents. It
helps you understand this crazy language that we call English. Okay back on topic.
So you’ve selected the account type, now it’s time to enter your PIN. PIN stands
for Personal Identification Number and this is used to finalize your
purchase. The PIN can be from 4 all the way up to 12 digits long. I would
not want to remember a 12-digit number. And this number just helps to protect
your account, it’s like a password. Sometimes we lose our card or someone
steals it and if the person stealing your card doesn’t know your PIN it can’t
take any money out of the machine but if you have Tap enabled, they can go make a
purchase. But with Tap the limit is usually $100. If you make a
purchase anything more than $100, you have to Insert or Swipe. Okay you punched
in your PIN, hit that green button, hit that okay button. And then you’ll see the
normal please wait, do not remove your card, sending,
receiving, processing, approved, thank you. Okay that’s how successful
transactions are done. What about the unsuccessful ones? What if you can’t
remember your PIN. You’ll get this message. What if the magstrip is damaged?
You’ll get this message. And what if you don’t have enough money in your account?
You’ll get this message. Sorry I don’t have a real-life example for you. I
had money in my account. Sorry not sorry.
Are we done? No? What about online purchases. Aha! But wait, we missed another
card type. What would happen if a credit card and a debit card had a baby
together. You would get a debit credit card. Of course you can always use a
credit card to make online purchases but not everybody can get a credit card. So
banks now give out debit credit cards. And have no fear they work exactly the
same as credit cards. So in this example don’t worry if it’s a credit card or
debit credit card because they had the same information on them. Each card has
numbers on them. Visa and Mastercards have 16 numbers on
the front and an expiration date. The expiration date is the month and the
year that the card will expire. And on the back you have the black magstrip
but you’ll also have a three-digit CVV or a CVC number. Now CVV stands for Card
Verification Value and CVC stands for and Card Verification Code. And of course
this is just another security feature. You’ll need all this information when
filling out a purchase online. OK, time for the joke. Had a bad mix-up at the
store today when the cashier said strip down facing me. Apparently she was
referring to my credit card. OK, who can explain to me why this is funny? Why was
there a misunderstanding? Let me know down in the comment section. And that’s
pretty much it. I hope this helped you learn how credit cards and debit cards
work and I hope you learn some new vocabulary along the way. If you want to
continue learning, you can check out these videos right here and of course
smash my face. Give me a good old punch in the face and subscribe to the channel.
And with that being said I hope everybody has a wonderful day. Peace

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