Credit and Debit Cards

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What is a Credit Card?

Back

A credit card is a payment card that allows the cardholder to borrow funds from a pre-approved limit to pay for goods and services. The cardholder must repay the borrowed amount, usually with interest, at a later date.

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What is a Debit Card?

Back

A debit card is a payment card that deducts money directly from the cardholder's bank account to pay for purchases. It does not involve borrowing money.

Front

What is the main advantage of using a Credit Card in emergencies?

Back

Credit cards provide access to funds that can be used immediately, making them useful for emergencies when cash is not available.

Front

What happens at the end of the month with a Credit Card?

Back

The cardholder receives a bill detailing all purchases made during the month, which must be paid back.

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Can using a Credit Card affect your credit score?

Back

Yes, using a credit card responsibly can help build a positive credit history, while missed payments can negatively impact your credit score.

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What does it mean when each purchase on a Credit Card is a loan?

Back

It means that when you use a credit card, you are borrowing money from the credit card issuer to make a purchase, which you must repay later.

Tags

CCSS.RI.5.3

CCSS.RI.5.5

CCSS.RI.6.3

CCSS.RI.6.5

CCSS.RI.7.5

Front

What is a key feature of both Credit and Debit Cards?

Back

Both cards are convenient to use for making purchases, either online or in-store.

Front

What is the difference between a Credit Card and a Debit Card in terms of payment?

Back

A credit card allows you to borrow money up to a limit, while a debit card uses your own money from your bank account.

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What is a potential risk of using a Credit Card?

Back

The risk includes accumulating debt if purchases are not paid off in full, leading to high-interest charges.

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What is a benefit of using a Debit Card?

Back

A debit card helps you manage your spending by only allowing you to spend what you have in your bank account.