Give an example of where you would use a credit card versus a debit card. List the pros and cons of each for this purchase you are thinking of. Describe why you would use one form of payment versus the other?

Credit cards and debit cards typically look almost identical, with 16-digit card numbers, expiration dates, and magnetic strips, and EMV chips.1 Both can make it easy and convenient to make purchases in stores or online, with one key difference. Debit cards allow you to spend money by drawing on funds you have deposited at the bank. Credit cards allow you to borrow money from the card issuer up to a certain limit in order to purchase items or withdraw cash.

Explanation:

Credit cards can offer certain advantages over debit cards, though they can also have some downsides. Here’s a closer look at the pros and cons of spending with credit cards.

The main drawbacks of using credit cards involve debt, credit score impacts, and cost.

Debit cards can have both upsides and downsides, just like credit cards.

Similar to credit cards, the biggest downsides of using debit cards involve credit score impacts and cost.