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

The differences between a credit card and a debit card depend in part on what state you are in. In Washington, there are a few main differences between the two. A credit card is issued by a financial institution such as a bank. It allows the holder to purchase goods and services with borrowed money, and the amount due is generally paid off over a set period of time. The credit card company pays the merchant and then the cardholder is charged interest on whatever balance is left at the end of the month. Credit cards are regulated by the federal government and Washington state laws, and certain protections and regulations are put in place to protect consumers. A debit card, on the other hand, is not a loan from a financial institution. When using a debit card, the funds are immediately taken out of the cardholder’s bank account. This means the cardholder does not have to worry about interest fees or late payments. Debit cards are governed by the Electronic Funds Transfer Act and do not have the same protections as credit cards. In summary, the main difference between a credit card and a debit card is that a credit card is a loan from a financial institution, while a debit card is not. Credit cards have certain protections and regulations in place in Washington, while debit cards are governed by the Electronic Funds Transfer Act.

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

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