Both types of credit can be abused. Abuse of a closed-end loan occurs when you purchase a much more expensive product than you originally intended. Such a purchasing decision has the effect of increasing not only the amount of principal borrowed, but also the interest cost of the loan. Again, the rule of thumb for purchasing something with open-end credit is to use it only when you can repay the loan before you are charged any interest. The APR will include not only the interest charged on balances but also any other fees the company charges you for the privilege of using their card.
Debit cards are more like checks than credit cards.
If you pay for a purchase with a debit card, your checking account will automatically be debited shortly after the purchase. Character is the basis on which a creditor will evaluate whether you are someone who has demonstrated dedication to repay past loans. Collateral is the term for some asset you would agree to give the lender if you default on the loan. Conditions refer to the likelihood that you will have a secure income that will not change before the loan comes due. The weight lenders give to these five Cs will vary.