Credit card vs debit card flashcard

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What is a credit card?

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A credit card is a card that allows you to borrow money from a bank to make purchases, which you must pay back later.

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What is a debit card?

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A debit card is a card that pulls money directly from your bank account when you make a purchase.

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How does a credit card work?

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A credit card allows you to buy items now and pay for them later, usually with interest if not paid in full.

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How does a debit card work?

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A debit card allows you to spend only the money you have in your bank account.

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What is a PIN?

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A PIN (Personal Identification Number) is a secret number used to authorize transactions, often required for debit card purchases.

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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.

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Can you use a debit card for online purchases?

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Yes, you can use a debit card for online purchases as long as it is accepted by the merchant.

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What is the main difference between a credit card and a debit card?

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

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What is interest in terms of credit cards?

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Interest is the cost of borrowing money on a credit card, usually expressed as a percentage.

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What is a credit limit?

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A credit limit is the maximum amount of money you can borrow on your credit card.