What is the difference between a credit transaction and a debit transaction?

@issac.schaden 

The main difference between a credit transaction and a debit transaction lies in how the funds are being used.

Credit Transaction:

• In a credit transaction, money is borrowed or used from a line of credit.
• This means that the individual or organization receives funds which are not immediately deducted from their own bank account.
• It creates a liability for the individual or organization as they are required to repay the borrowed amount with interest by a specified due date.
• Common examples of credit transactions include credit card purchases, loans, mortgages, or any instance where funds are borrowed.

Debit Transaction:

• In a debit transaction, money is directly deducted from the individual or organization's bank account.
• It involves the use of funds that are already available in the bank account.
• The debited amount is instantly reduced from the individual or organization's account balance.
• Examples of debit transactions include ATM withdrawals, direct payments using a debit card, writing checks, or any payment made using the available funds in the account.

Overall, the fundamental difference lies in the source of funds - credit transactions involve borrowing funds, whereas debit transactions use the funds already available in the bank account.