How does debit card and credit card work?

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  • Shay
    Lv 7
    1 month ago
    Best Answer

    Debit card - You open a checking account with your own money at a bank.  You get a debit card and you can use it to access the money that is in  your account.  When your funds get low - you add more money to your account.  You are spending your money that you already have in the account.  A debit card does not  help or hurt your credit score.  Nothing about a debit card is reported to the credit bureaus.  

    Credit card - you apply for a credit card.  The card company decides the limit of the card.  You can spend any amount up to the limit of the card.  You make payments until it is paid back.   You can re-use any part of the balance that is available.   If you don't pay in full every billing cycle, there is interest charges added to the account balance.  There are penalties if you miss a due date.  A credit card can either help build your credit score if you use it wisely or it can destroy your credit score if you use it poorly.  A credit card is a revolving loan.  You use money that is not yours and then pay it back.

  • Anonymous
    1 month ago

    Both are for grown ups, not children. You have 5-10 years or so to worry about it.

  • 1 month ago

    Pretty good for the most part. Debit and credit cards are different in that if you use a credit card you get a statement and it is like a loan that you can pay back with interest. A debit card takes the money directly from your bank account.

    • oklatom
      Lv 7
      4 weeks agoReport

      debit card works like a check and takes the money from your account.

  • 1 month ago

    Debit card is spending your money, credit card is borrowing money. 

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  • 1 month ago

    one is for debt other is for crediting with payment

  • 1 month ago

    You steal money from the bank and start to take over the world

  • Jamie
    Lv 7
    1 month ago

    Debit works a bit like a cash transaction , it will be taken from funds in your account and the amount of money in there will shrink , just as it would if you used physical cash .

    Credit works by building a debt on which you usually pay interest . If you are offered a credit card , please keep in mind very few things are worth the interest charged , particularly grocery shopping as it has no lasting value .

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