Debit vs. Credit & Credit Reports

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What is a Debit Card?

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A debit card is a payment card that deducts money directly from a consumer's checking account to pay for 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 from a pre-approved limit to pay for purchases, which must be paid back later.

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What happens when you use a Credit Card?

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When you use a credit card, you are borrowing money to make a purchase, and you will receive a bill later to repay that amount.

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What is a Credit Report?

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A credit report is a detailed report of an individual's credit history, including credit accounts, payment history, and outstanding debts.

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What is the main difference between a Debit Card and a Credit Card?

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The main difference is that a debit card uses money you already have in your bank account, while a credit card allows you to borrow money.

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What does it mean to 'pay later' with a Credit Card?

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It means that you can make a purchase now and repay the amount later, usually within a month.

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What is a billing cycle?

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A billing cycle is the period of time between billings for credit card accounts, typically lasting about a month.

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What is an example of using a Debit Card?

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Using a debit card to pay for groceries directly deducts the amount from your checking account.

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What is an example of using a Credit Card?

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Using a credit card to book a hotel room allows you to stay now and pay for it later.

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What does it mean to have a good credit score?

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A good credit score indicates that you are a responsible borrower and are likely to repay your debts on time.