Credit or Debit?

When you use a debit card, money is pulled directly from of your checking account.

• True

• False

Cash is safer and more convenient than using a debit or credit card.

• True

• False

Answer explanation

Debit and credit are safer and more convenient forms of payments. These cards can easily be replaced if lost and come with fraud protection that keeps your money safe.

When you use credit for payment, you borrow money and pay it back in smaller amounts over time.

• True

• False

You visit an ATM and withdraw $150 from your checking account. Is this an example of using debit or credit?

• debit

• credit

You visit a mechanic and discover your car needs new brake pads. You pay for the brake pads + service with a card. That amount then shows up on a monthly bill for the card that you have to pay back in full by the end of the month. Is this an example of using debit or credit?

• debit

• credit

If you forget to pay your monthly credit card bill by its due date, the bank or credit card company won't care and there will be no extra fees to pay.

• True

• False

Answer explanation

If you forget to pay your monthly credit card bill by its due date, the credit card company WILL care and will charge a hefty late fee you must pay on top of the money you already owe.

One benefit to using credit is it allows you to purchase BIG items like a house or car. You can then make smaller monthly payments and pay it off over a longer period of time.

• True

• False

Your mom takes the family dog to the vet for shots and minor surgery. The cost of the vet visit shows up on a monthly bill and must be repaid in full by the end of the month to avoid paying interest. Did your mom pay using debit or credit?

• debit

• credit

Your older brother visits the bank to take out a loan to buy a new camper. Is this an example of using debit or credit?

• debit

• credit

One benefit to using credit is it can be used as a back-up payment option should your debit card get denied.

• True

• False