Which statement best describes credit and debit card payments?

• A. They are the same and interchangeable.
• B. Debit cards allow customers to borrow money from a bank; credit cards deduct funds from the checking account.
• C. Credit cards allow customers to borrow money from a bank; debit cards deduct funds from the customer's checking account.
• D. Card payments are only for offline use.

Answer: (C)

Credit and debit card payments differ in how funds are accessed. Debit cards draw money directly from the cardholder’s bank account at the point of purchase, so funds are deducted from the checking or savings account. Credit cards, on the other hand, let the card issuer lend you money up to a credit limit, and you repay that borrowed amount later, often with interest if not paid in full. This distinction is exactly captured by the statement that credit cards allow customers to borrow money from a bank while debit cards deduct funds from the customer's checking account. The other descriptions misstate how borrowing versus funds transfer works, and card payments can be made online or offline, not just offline.