Distinguishing Between Debit and Credit Cards

The video tutorial covers the sixth-grade concept of personal financial literacy, focusing on debit and credit cards. It explains the differences between these payment methods, highlighting the costs associated with credit cards, such as interest and fees. The tutorial also discusses the benefits of saving money to pay with cash and the limitations of using a debit card without sufficient funds. The video concludes with an explanation of the correct answer to a problem from the 2017 released STAAR test, emphasizing the importance of financial decision-making.

What grade level is the concept of personal financial literacy being discussed?

• Fifth grade

• Sixth grade

• Eighth grade

• Seventh grade

What standard does the concept of personal financial literacy fall under?

• 5.11 D

• 7.12 C

• 6.14 B

• 6.13 A

What is a potential downside of using a credit card?

• Unlimited spending

• No need to repay

• Immediate payment required

• Interest and fees

What is a credit limit?

• A fee charged annually

• The maximum amount you can borrow

• Interest accrued monthly

• The minimum amount you can spend

Why might paying cash later be considered the best option?

• It allows for immediate gratification

• It avoids potential interest and fees

• It requires a credit check

• It offers reward points

What does it mean to save money and pay cash at a later date?

• Waiting until you have enough money to buy outright

• Taking out a loan from the bank

• Using a credit card and paying it off immediately

• Borrowing money from a friend

What is the main problem with using a debit card when you don't have enough money?

• It increases the credit limit

• It automatically loans you money

• It may lead to overdraft fees

• It pulls money directly from your account

How is a debit card different from a credit card?

• A debit card charges more interest than a credit card

• A debit card pulls funds from your account, a credit card does not

• A debit card has no spending limit, unlike a credit card

• A debit card allows borrowing, a credit card does not

What is the similarity between using cash and a debit card at a later date?

• Both incur interest

• Both require borrowing

• Both offer reward points

• Both use real money

What is the best option if you want to avoid extra costs?

• Borrowing money from a bank

• Saving and using a debit card later

• Using a credit card now

• Paying with cash immediately