Final answer:
It is true that consumers enrolled in mobile banking can check their credit card balances through a mobile app. Credit card use is essentially a short-term loan from the credit card company, whereas debit card transactions draw directly from one's bank account. Mobile banking apps provide a convenient way to manage finances and make informed decisions on spending.
Step-by-step explanation:
The statement that consumers who have enrolled in mobile banking and downloaded the mobile application to their cell phones can check their credit card balances before making major purchases is true. When using a credit card, the card immediately transfers money from the credit card company's checking account to the seller, which means that any purchases made are essentially a short-term loan taken out from the credit card company, to be repaid by the user later. Mobile banking apps typically allow users to view their credit card balances, transactions, and credit limits, giving them the opportunity to manage their finances and make informed decisions about their spending.
The function of debit cards differs slightly. When you use a debit card, the money is transferred electronically from your actual bank account, and debit cards are connected directly to your checking or savings account. Unlike a credit line from a credit card which is not included in M1 or M2 monetary aggregates, the balances held in checking accounts are part of M1.
Understanding the differences between credit and debit transactions is important for financial literacy and can help with managing personal finances and avoiding debt. With mobile banking, consumers have more control and can be conscious of their credit card balances, which is essential for maintaining good financial health.