Lesson 2 Financial Literacy: Debit Vs Credit

Question 1

Why might someone use credit instead of debit in an emergency?

Accepted Answer

They don’t have enough money in their account

Question 2

What does the word "interest" mean in money?

Accepted Answer

Extra money you pay when you don’t pay your full bill

Question 3

What is a budget?

Accepted Answer

A plan for how to spend and save money

Question 4

If you don’t pay your credit card bill for months, what will happen?

Accepted Answer

The amount you owe will grow bigger

Question 5

Why is a debit card safer than carrying cash?

Accepted Answer

You won’t lose it forever

Question 6

What happens if you only pay the minimum payment every month?

Accepted Answer

Your debt grows because of interest

Question 7

What does a debit card use to pay for things?

Accepted Answer

Your own money from the bank

Question 8

What’s the best way to pay for something expensive like a bike?

Accepted Answer

Save money first and pay with debit

Question 9

What’s a smart way to use a debit card?

Accepted Answer

Only spend money you already have

Question 10

What does a credit card let you do?

Accepted Answer

Borrow money you must pay back

Question 11

What’s one way to avoid credit card debt?

Accepted Answer

Always pay more than the minimum

Question 12

Which card could charge you extra money if you don’t pay back on time?

Accepted Answer

Credit card

Question 13

What is a minimum payment on a credit card?

Accepted Answer

The smallest amount you can pay to avoid penalties

Question 14

What is a credit card bill?

Accepted Answer

A list of borrowed money you owe back

Question 15

If you owe $200 on a credit card and pay $20, how much do you still owe?

Accepted Answer

$180

Question 16

Why should you avoid using a credit card for fun items you don’t need?

Accepted Answer

You may owe money for a long time

Question 17

You want to buy groceries. Which card should you use?

Accepted Answer

Debit

Question 18

If you only pay the minimum payment, what happens to the rest of the bill?

Accepted Answer

It earns interest and grows

Question 19

Your car needs an emergency repair. Which card might be best?

Accepted Answer

Credit

Question 20

You’re booking a hotel. Why might a credit card work better?

Accepted Answer

Hotels prefer credit cards

Questions 20