Question

A credit card is a plastic payment card that provides the cardholder electronic access to his/her bank account at the financial institution. (True/False)

Hint:

Ask whose money is used when the card is swiped. A card that draws on your own account is a debit card, not a credit card.

Answer 1

Step 1: Give the answer:
The statement is False.

Step 2: What the statement describes:
A plastic card that gives the holder electronic access to his or her own bank account is a debit card (ATM card). Money is taken straight out of the account balance.

Step 3: What a credit card really is:
A credit card is a plastic card issued by a bank. It lets the holder buy goods and services on credit, up to a set limit.
The bank pays the seller first. The holder repays the bank later, within a billing cycle, or pays interest.

Step 4: Compare the two cards:
1. Debit card: uses the holder's own money in the account. Credit card: uses money lent by the bank.
2. Debit card: payment is deducted at once. Credit card: payment is made later.

Final Answer:
False. The statement describes a debit card, not a credit card.