Which of the following terms describes a card that allows you to borrow money to make purchases?

• A. Debit Card
• B. Credit Card
• C. Check Card
• D. Store Card

Answer: (B)

Borrowing money to make purchases is handled through a line of credit provided by the card issuer. A credit card gives you this revolving line of credit up to a set limit: when you swipe, the issuer pays the merchant, and you owe that amount to the issuer. You can pay the balance in full to avoid interest, or carry a balance and incur interest over time. This borrowing feature distinguishes it from other cards.

Debit or check cards, in contrast, draw funds directly from your bank account at the time of purchase, so no borrowing is involved. A store card is issued by a retailer and can offer credit terms, but the standard term for a card that lets you borrow money for purchases across various merchants is a credit card.