Mini Lesson:
Spending 4.6b
Debit v.s. Credit
The following table shows the differences between debit and credit cards, however the headings are missing. Try and match the headings “Debit Card” and “Credit Card” to their respective columns. Earn 10 ClassBank Bucks for a correct match!
Type of Card | | |
Source of Money | Takes money directly from your bank account. | Borrows money from the bank (you repay later). |
Spending Limit | Limited to the amount of money in your account. | Limited to your credit card’s borrowing limit. |
Interest Charges | No interest since it's your own money. | Interest is charged if the balance isn't paid in full. |
Ease of Use | Easy to track spending since it’s instant. | Can overspend if not careful, leading to debt. |
Purpose | Best for everyday purchases and budgeting. | Useful for big purchases or building credit history. |
Fees and Charges | Minimal fees (e.g., ATM fees). | Possible fees (e.g., late payments or annual fees). |
Fraud Protection | Generally offers fraud protection. | Offers stronger fraud protection in most cases. |
Debit Card
Credit Card
Discussion
Why do you think different people use different cards?
What do you think are the benefits of using a credit card? A debit card?
What do you think are the disadvantages of using a credit card? A debit card?
Which one would you prefer to use and for what scenarios?