Which of the Following Statements Comparing Debit Cards to Credit Cards is True?

In order to make an informed decision about which type of card is right for you, it’s important to understand the key differences between debit and credit cards. This blog post will compare and contrast the two, highlighting the key pros and cons of each.

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Debit cards are linked directly to a checking account.

A debit card is a plastic card that gives the cardholder a set amount of funds against each purchase that they make. A credit card, on the other hand, allows the cardholder to borrow money against the purchase which can be used in the future.

Credit cards are linked to a line of credit.

Debit cards are linked directly to a checking account, whereas a credit card entails borrowing money from a lending institution. When a purchase is made, the funds are transferred immediately from the account on a debit card, and when a credit card is used, the credit card company pays the vendor for the purchase.

Debit cards allow cardholders to spend only the money they have.

Credit cards allow cardholders to borrow money from the issuer up to a certain limit in order to purchase items or withdraw cash. Debit cards, on the other hand, are linked directly with a checking account and allow cardholders to spend only the money they have.

Credit cards allow cardholders to borrow money from a lender.

Debit cards allow cardholders to spend only the money they have. Credit cards allow cardholders to borrow money from a lender.

Debit cards typically have lower fees than credit cards.

Debit cards usually have lower fees than credit cards, but there are some exceptions. Debit cards typically have lower interest rates, but credit cards usually have better rewards programs. Debit cards are a good option for people who want to avoid debt, but they can also be a good option for people who want to build credit.

Credit cards typically have higher interest rates than debit cards.

Debit cards offer a number of advantages over credit cards, particularly when it comes to fees and interest rates. Debit cards typically have lower fees than credit cards, and they also often offer lower interest rates. This is because when you use a debit card, you are using your own money, rather than borrowing money from a lender. As such, lenders are often willing to offer lower interest rates on debit cards.

Debit cards can help cardholders build a good credit history.

Debit cards are similar to credit cards in that they are both types of plastic cards that can be used to make purchases. When a purchase is made, the funds are transferred immediately from the account to pay for the purchase.

Credit cards can help cardholders access a line of credit in the future.

Debit cards are linked directly with a checking account, whereas a credit card entails borrowing money from a lending institution. When a purchase is made, the funds are transferred immediately from the account on a debit card, and when a credit card is used, the credit card company pays the vendor for the purchase.

There are advantages and disadvantages to using either type of card. One advantage of using a debit card is that it can help cardholders avoid debt because they can only spend the money that is available in their checking account. Credit cards may offer convenience and flexibility because they can be used to make purchases even if the cardholder does not have cash on hand. In addition, credit cards can help cardholders build a good credit history, which may be beneficial in the future when they need to access a line of credit.