Asked by Chris Hughes on May 01, 2024
Verified
Are credit cards and debit cards money? What's the difference between credit and debit cards?
Credit Cards
Financial instruments that allow holders to borrow funds to pay for goods and services with the expectation of repaying the loan with interest.
Debit Cards
Plastic payment cards that allow users to make transactions by deducting money directly from their checking account, rather than incurring debt like a credit card.
Money
A medium of exchange that is widely accepted in transactions for goods and services, acting as a unit of account, a store of value, and sometimes, a standard of deferred payment.
- Acquire knowledge on the theoretical and practical facets of how money functions within an economic system.
Verified Answer
DL
Dmiria LivasMay 02, 2024
Final Answer :
Neither credit cards nor debit cards are money, but credit cards are very different from debit cards. Credit cards are not a medium of exchange, but are a means of deferring payment. Debit cards allow the user immediate access to deposits in a bank account. These deposits are part of the money supply.
Learning Objectives
- Acquire knowledge on the theoretical and practical facets of how money functions within an economic system.