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In Personal Finance, it might help to think of it as follows:
A debit is money withdrawn from an account of money that you currently have.
But a debt is money borrowed because "i" don't have it!
In accounting, though, the term "debit" is used differently than we might think of in conversational English. In double-entry accounting a "debit" entry is used to record an increase to assets and expenses and to record a decrease in liabilities, revenues and equity.
The terms that describe "debt" in accounting are in there as well. A debt (or obligation) already paid is an "expense", while a debt (or obligation) owed is a "liability".
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What is the difference between debt and debit?
Debt is money that is owed to someone else, while debit is a transaction that reduces the balance in a bank account.
What is the difference between debt and a withdrawal?
Debt is when you owe money. When you withdraw money, you are taking from money you already have. The reason for this question is that some confuse the word "debt" (money owed) with "debit" (withdrawing money). You use a debit card because there is money to withdraw, but if you are in debt on that account, the card would not work. One single letter makes a lot of difference.
What is the main difference between credit and debit?
The main difference between credit and debit is that credit allows you to borrow money that you have to pay back later, while debit uses money you already have in your account.
Is it possible to pay a debt collector with a debit card?
Yes, it is possible to pay a debt collector with a debit card.
What is the difference between debt card and credit card?
A debit card removes money from your account the moment you use it. A credit card is a promise by you to pay the bill when it comes in the mail. Simply put: Debit Card - pay now. Credit card - pay later.
