DECA Business Administration Core Practice Exam 2025 - Free Business Administration Core Practice Questions and Study Guide

Question: 1 / 400

How does a debit card operate in financial transactions?

By borrowing funds for the user

By using funds from the user's savings account

By electronically transferring funds from the user's account

A debit card operates by electronically transferring funds from the user's account at the moment a transaction takes place. When you make a purchase using a debit card, the amount is immediately deducted from your checking account—or in some cases, a savings account—allowing for instant payment without the need to carry cash. This system enhances convenience for users, as they can access their finances directly without needing to borrow money or rely on credit.

The electronic nature of this transaction means that users can manage their spending in real-time, which is different from credit cards that allow spending beyond one's available cash. This approach, therefore, maintains a direct link to the funds the user has available, which can help in budgeting and financial management.

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By providing a line of credit to the user

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