Sponsored Newspapers In Education Content
| SUNDAY,
APRIL 3, 2016
3
CREDIT CARDS VS. DEBIT CARDS
What’s the difference?
A debit card
is connected to your checking account. So when you make a purchase with
a debit card, funds are taken from your bank account then transferred to the store where
you bought the item or service. In a nutshell: you can only purchase items with a debit
card that can be covered by the money in your account.
A credit card
lets you borrow money from a financial institution to pay for things,
with the understanding that you’ll repay that amount later. Credit cards are not
directly linked to your checking account, so you’re not required to have the
funds in your checking account to cover purchases. But if you don’t pay off
your credit card bill in full each month, you’ll have to pay interest on the
amount you owe.
PAYING IT BACK. WHAT’S YOUR PLAN?
If you can’t pay off your credit balance in total each month, interest will
be added to the amount you owe. And that can add up big-time. You
can end up paying way more for an item or service than it originally
cost. The longer you take to pay off an item, the more it’ll cost you.
CREDIT 411:
Good credit is
important for
more than just
loan applications.
Your credit history
can also affect how
much you pay for car
insurance. Employers
and landlords often
pull credit reports on
potential employees
and tenants, too.
