Which of the following is true about debit cards?(1 point)
Responses
You can run up huge debts if you don’t pay the balance off quickly.
They are issued by networks such as Visa.
When you use one, the money is taken directly from your bank account.
They usually charge a lower interest rate than credit cards.
When you use one, the money is taken directly from your bank account.
The true statement about debit cards is that when you use one, the money is taken directly from your bank account.
The correct statement about debit cards is that "When you use one, the money is taken directly from your bank account." This means that when you make a purchase using a debit card, the funds are immediately deducted from your available balance in your bank account.
To determine the answer from the given options, you need to understand the features of debit cards. Let's break down the options:
1. "You can run up huge debts if you don’t pay the balance off quickly." This statement is not true for debit cards. Unlike credit cards, which allow you to borrow money that you then need to repay with interest, debit cards only allow you to spend the money you already have in your bank account. Therefore, you cannot accumulate debts with a debit card.
2. "They are issued by networks such as Visa." This statement is also true for debit cards. Debit cards are commonly issued by major card networks like Visa, Mastercard, American Express, or Discover. These networks provide the infrastructure and processing capabilities that allow debit card transactions to take place.
3. "When you use one, the money is taken directly from your bank account." As mentioned earlier, this statement is true. Debit card transactions are instantly deducted from your linked bank account, ensuring that you only spend the money you have available in your account.
4. "They usually charge a lower interest rate than credit cards." This statement is not true. Since debit cards do not involve borrowing money, they do not charge interest rates. In contrast, credit cards may charge high interest rates if you carry a balance from month to month.
After examining all the options, the correct answer is that debit cards take money directly from your bank account when used.