Click image to open full size
Financial Literacy
Grade 7-12
Debit vs Credit Cards Cheat Sheet
A printable reference covering debit cards, credit cards, interest, fees, fraud protection, budgeting, and responsible card choices for grades 7-12.
Related Tools
Related Labs
Related Worksheets
This cheat sheet explains the main differences between debit cards and credit cards so students can make safer everyday money decisions. Debit cards spend money from a bank account, while credit cards let a person borrow money and repay it later. Students need this reference because card choices affect budgets, fees, credit history, and financial security. It is designed to help compare costs, benefits, and risks quickly.
Key Facts
- A debit card pulls money directly from a checking account, so the spending limit is usually the account balance.
- A credit card lets you borrow up to a credit limit, and unpaid balances can be charged interest.
- Available debit funds = checking account balance minus pending transactions and holds.
- Credit card interest for one month can be estimated as monthly interest = unpaid balance x APR / 12.
- Paying the full credit card statement balance by the due date usually avoids interest charges on purchases.
- Minimum payments keep an account current, but they can make debt grow because interest continues on the unpaid balance.
- Credit utilization = credit card balance / credit limit, and lower utilization is usually better for a credit score.
- Both card types can have fees, including overdraft fees for debit cards and late payment, annual, or cash advance fees for credit cards.
Vocabulary
- Debit Card
- A payment card that takes money directly from a checking account when a purchase is made.
- Credit Card
- A payment card that lets a person borrow money from the card issuer and repay it later.
- APR
- Annual percentage rate is the yearly interest rate charged on borrowed money if a credit card balance is not paid in full.
- Credit Limit
- The maximum amount a person is allowed to borrow on a credit card account.
- Overdraft
- An overdraft happens when a bank account is charged more money than it currently has available.
- Credit Score
- A credit score is a number that estimates how likely a person is to repay borrowed money on time.
Common Mistakes to Avoid
- Thinking a debit card is the same as a credit card is wrong because debit uses your own bank account money while credit creates a loan that must be repaid.
- Only paying the minimum balance is risky because interest can keep adding to the unpaid amount and make purchases cost much more.
- Ignoring pending transactions is a mistake because a debit account may look like it has more available money than it really does.
- Using a credit card as extra income is wrong because a credit limit is borrowed money, not money earned or saved.
- Skipping the due date is costly because late payments can lead to fees, interest charges, and damage to credit history.
Practice Questions
- 1 A checking account has a balance of 180 dollars, with a pending gas station hold of 40 dollars. What are the available debit funds?
- 2 A credit card has an unpaid balance of 600 dollars and an APR of 24 percent. Estimate one month of interest using monthly interest = unpaid balance x APR / 12.
- 3 A student has a credit card balance of 250 dollars and a credit limit of 1,000 dollars. What is the credit utilization?
- 4 A student wants to buy a 70 dollar item but has only 55 dollars in checking and a credit card with available credit. Explain which card is safer to use and what factors should guide the decision.