Ground Fault Circuit Interrupters protect people from electric shock.
Arc Fault Circuit Interrupters prevent electrical arcing, which causes fires.
GFCI and AFCI protection can be installed at the receptacle itself (those square receptacles with the ‘Test’ and ‘Reset’ buttons) or at the electrical panel in the form of a special breaker (also with a ‘Test’ button).
To paraphrase the standards set by the National Electrical Code:
GFCI protection is required in wet areas such as kitchens, bathrooms, laundry rooms, garages, unfinished basements, exteriors, and near pools or spas.
AFCI protection is needed on all circuits in living areas such as bedrooms, living rooms, dining rooms, dens, sunrooms, recreation rooms, closets, hallways, etc.
How Ground Fault Circuit Interrupters work:
Electricity always finds the fastest route to ground. Breakers, switches, appliances, fixtures are grounded so that electricity stays in the circuit and goes to the right places. A breaker on a 15 Amp closed-loop circuit sends electricity out on the load wire (black wire) to power a light or appliance, and then the current goes back to the source along the neutral (white) wire. The GFCI breaker has small electronic and mechanical components inside it that measure the current going out and coming back in. If the GFCI device senses a weaker current returning than it sent out, that means the electricity has found an alternate route to ground–perhaps through a person! This is known as a ground fault.
When a ground fault is detected the breaker trips, which is an immediate mechanical disconnection of the circuit within the breaker. In case a fixture or switch box has been energized and you are electrocuted, the circuit will be cut so that it will be a quick shock instead of a more harmful one. That circuit cannot be used again until it the breaker has safely been switched back on.
How Arc Fault Circuit Interrupters work:
Electrical arcing occurs when a current jumps from one conductor to another, and usually happens within walls at cracked, broken or damaged electrical insulation. This can also happen if a floor lamp is not all the way plugged in. A conductor is so close to the exposed hot wire that the current actually jumps across the gap. An electrical arc looks like a tiny lightning bolt, and sometimes has an audible snapping or crackling noise. If you flip a light switch very slowly you can hear this crackling inside the switch. The greater the current, the farther it can jump. And as long as the circuit is live, the arcing will continue. Electrical arcs are white hot and have been measured at thousands of degrees Fahrenheit. This can surely start a fire. You don’t want this happening in your home.
AFCI protection devices aren’t entirely different from GFCIs. AFCIs are more sensitive and monitor the current on the circuit for anomalies that meet the signatures of arc faults. As soon as it detects arcing it breaks the circuit before the arcing can cause a fire.