When you slide your debit card to pay, the cashier asks you “debit or credit?” What is the difference between these two choices?

A. With “debit” the funds come out of your checking account within the next 3-4 days; with “credit” you have 20-25 days to pay the amount.

B. “Debit” means that the money comes out of your checking account immediately; “Credit” means that the funds will come out of your checking account within 2-3 days.

C. Choosing “credit” will help you build your credit score; choosing “debit” will have no impact on your credit score.

D. Convenience stores always charge you a fee for choosing “credit”; there is no fee for using “debit”.

2. A credit union can usually offer lower interest rates on loans (APR) than commercial banks. What is the main reason that credit unions can offer lower interest rates than commercial banks?

A. They have higher investment in technology and fixed assets (buildings) than banks, which gives them greater tax deductions.

B. Credit unions have favorable tax treatment by the IRS

C. They are legally able to offer lower interest rates on CDs and savings accounts, which makes it easier to get loans.

D. Simple supply and demand – there are more credit unions than banks, so they have to charge lower interest rates to compete.