Final answer:
Sales to customers using bank credit cards involve a transfer of funds from the credit card company to the seller, with the customer owing the amount at month's end. Debit cards transfer funds directly from the buyer's account. Interest rates represent the cost of maintaining a balance on a credit card.
Step-by-step explanation:
When it comes to sales to customers who use bank credit cards, there are specific considerations and practices a seller must be aware of. A credit card transaction immediately transfers money from the credit card company's checking account to the seller. At the end of the month, the customer owes the borrowed amount to the credit card company.
Unlike credit cards, a debit card works differently as it is an instruction to the user's bank to transfer money directly and immediately from their bank account to the seller. In terms of obtaining credit, a good starting point is checking with your own bank or applying for a department store or gas station credit card, although these may carry higher interest rates. The interest rate is the cost of carrying a balance from one month to the next, essentially the price paid for the use of the credit card company's money.
It's important to understand the concept of 'good debt' and 'bad debt'. Questions such as what banks consider when lending money, how to maintain a good credit score, and the costs of borrowing, including interest rates and additional fees, are crucial for making informed financial decisions.