Text files contain lines of text. A file with a .txt extension is a text file. It is simple characters. But txt is not the only one. html and many word processor formats are stored in text format. This allows it to easily be edited in programs such as notepad.exe.
Binary files have no real limitations.
You can store the data in any variable type you choose to. Binary files include such files as images and sounds. You can store virtually any values in there though. Now we declare a pointer to a file.