Interest, Credit & Debit Cards

You buy groceries with a card. The money comes directly from your bank account.

• Credit card

• Debit card

• Both

Purchases with this card can be paid over time.

• Credit card

• Debit card

• Both

To avoid carrying cash, Ned pays for his lunch using this card. Each time he uses this card his checking account decreases. Which card did he use?

• Credit card

• Debit card

• Both

You purchase shoes with a card. There isn't enough money in your account and you are charged an overdraft fee.

• Credit card

• Debit card

• Both

Mrs. Brady took her family out to eat. She handed the waitress a card to purchase the meal. This charge appeared on a bill that she paid three weeks later. Which card did she use?

• Credit card

• Debit card

• Both

Your dad's car is damaged while parked outside during a storm. He pays for the repairs with a card. The repairs then show up on the monthly bill for the card that he can pay back in smaller amounts over time. Did your dad pay with debit or credit?

• debit

• credit

Your mom takes you shopping for snacks, hygiene essentials, and decorations for your dorm room. She pays for the purchase with a card, enters her PIN, and gets $20 in cash back from her checking account. Is this an example of using debit or credit?

• debit

• credit

Which is a disadvantage of a credit card?

• Credit cards are buy-now, pay later

• Credit cards provide preapproved credit

• Credit cards charge interest

• Credit cards are the best way to pay for something online, because you can dispute a the charge

How do you avoid paying interest on your credit card (or any other loan for that matter)?

• Always make the minimum payment over time

• Pay interest 1st, then pay what you can on leftover balance

• Always make the full payment on time

• Pay the principal 1st, then pay what you can on interest

Which is TRUE when you make only the minimum payment each month?

• You are charged interest on the remaining balance

• Your credit line is restored to its maximum amount

• Credit card companies have permission to sell your information

• It is the fastest way to pay off your debt