13-4: Payment Methods

Key Concept

Consumers often use methods other than cash or a check to pay for purchases.

Debit Cards You can use a debit card to pay for a purchase out of your checking account. Typical characteristics of debit cards are listed below.

  • • Accepted by most merchants

  • • Payment deducted from account at time of purchase.

  • • A purchase that exceeds your account balance may be denied, or may result in a fee.

  • • No interest charged on purchases.

  • • Can get cash back at the register with a purchase

  • • Reporting a lost or stolen card protects your account.

Credit Cards You can use a credit card to make a purchase by borrowing money. Typical characteristics of credit cards are listed below.

  • • Accepted by most merchants

  • • Allows you to pay for a purchase over time

  • • Interest may be charged on unpaid balance.

  • • Late payment may result in a fee or may raise interest rate.

  • • Cannot get cash back at the register with a purchase

  • • Reporting a lost or stolen card protects your account.

  • • Responsible use builds a positive credit history.

Stored-Value Cards A stored-value card is a prepaid card electronically coded to be worth a specified amount of money. Examples include gift cards and prepaid fare cards for public transportation. Typical characteristics of stored-value cards are listed below.

  • • Many cards are specific to a merchant or an area.

  • • No credit card or bank account needed to buy or use card.

  • • Spending limited to value of card.

  • • No interest charged on purchases.

  • • Cannot get cash back with a purchase or redeem the card for cash

  • • Value of a lost or stolen card often not protected.


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Table of Contents

Digits, Grade 8, Volume 2, Homework Helper Unit D: Two-Dimensional Shapes Unit E: Measurement and Data Unit F: Personal Financial Literacy Unit G: Step-Up Lessons English/Spanish Glossary Formulas Math Symbols Formulas Measures Properties