What is the difference between a credit card and a debit card?

Credit cards and debit cards are both payment methods used to purchase goods or services, however, there are some key differences between the two. Credit cards are credit instruments issued by banks or financial institutions. When a credit card is used, the cardholder is borrowing money from the issuing bank and does not need to pay the full balance before the due date. Instead, interest is charged on the remaining balance. Debit cards, on the other hand, are linked to a checking or savings account. When a debit card is swiped, the cardholder’s account is debited instantly and the cost of the purchase is deducted from the account balance. Another difference between the two is the need for a credit check before a credit card is issued. Debit cards do not typically require a credit check and can usually be obtained without one. The Credit Card Act of 2009, based in Florida, governs the use of both credit cards and debit cards. It provides additional protections for consumers such as the right to dispute transactions and limits the fees that can be charged by credit and debit card issuers. In summary, credit cards and debit cards are both payment options for consumers, but there are key differences between the two. Credit cards are a form of loan and require a credit check, whereas debit cards are linked to an account and do not require a credit check. Additionally, the Credit Card Act of 2009 provides additional protections for consumers using either type of card.

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What is the difference between a credit card and a debit card?

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