Question

Determine whether each statement describes a characteristic of a debit card or a credit card.

Select the correct answer in each row.

Statement Debit Card Credit Card
It builds credit history, which can positively affect a person’s credit score.
The money used to purchase an item is automatically withdrawn from a bank account.
Each purchase is a loan and will need to be paid back in the future.
Consumers may be charged interest on their purchases.

Answer 1

Statement — Debit Card — Credit Card

1) It builds credit history, which can positively affect a person’s credit score. — No — Yes
2) The money used to purchase an item is automatically withdrawn from a bank account. — Yes — No
3) Each purchase is a loan and will need to be paid back in the future. — No — Yes
4) Consumers may be charged interest on their purchases. — No — Yes

(Brief: Debit cards draw from your bank account immediately; credit cards extend a loan/line of credit that can affect your credit history and may incur interest if not paid in full.)