Debit & Credit Cards

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What is a Debit Card?

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A debit card is a payment card that withdraws money directly from a checking or savings account when making a purchase.

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What is a Credit Card?

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A credit card is a payment card that allows the holder to borrow funds to pay for goods and services, with the agreement to pay back the borrowed amount later.

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How does a Debit Card work?

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When you use a debit card, the money is taken directly from your bank account, meaning you can only spend what you have.

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How does a Credit Card work?

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When you use a credit card, you are borrowing money from the credit card issuer, which you must pay back, often with interest.

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What happens if you don't pay your Credit Card bill on time?

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If you don't pay your credit card bill on time, you may incur late fees and interest charges, and it can negatively affect your credit score.

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Can you incur debt with a Debit Card?

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No, you cannot incur debt with a debit card because it only allows you to spend the money you have in your account.

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What is interest in terms of Credit Cards?

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Interest is a fee charged by the credit card issuer for borrowing money, usually expressed as a percentage of the outstanding balance.

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What is the benefit of paying your Credit Card balance in full each month?

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Paying your credit card balance in full each month can help you avoid interest charges and maintain a good credit score.

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What is a potential risk of using a Credit Card?

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A potential risk of using a credit card is accumulating unnecessary debt if you spend more than you can afford to pay back.

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What is a checking account?

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A checking account is a bank account that allows for easy access to your money for daily transactions, such as deposits and withdrawals.