Credit Cards

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What is a credit card?

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A credit card is a financial tool that allows individuals to borrow money from a bank or financial institution to make purchases, with the agreement to pay back the borrowed amount, usually with interest.

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Who do you agree to pay when you make a credit card purchase?

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You agree to pay your credit card company.

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How can you avoid paying interest fees on your credit card?

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By paying off the full balance, on time, each month.

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What happens if you don't have enough money to pay for the things you charged on your credit card?

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You end up owing more than the original amount of money you charged.

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What is the minimum payment on a credit card?

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The least amount that must be paid on a credit card each month.

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What is a credit limit?

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The maximum amount of money that can be charged on a credit card.

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What is a credit score?

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A numerical representation of a person's creditworthiness, based on their credit history.

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How does a high credit score affect interest rates?

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Having a high credit score allows lenders to offer lower interest rates.

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What is an interest rate?

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The percentage of a loan amount that is charged as interest to the borrower.

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What is a late fee?

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A charge incurred when a payment is not made by the due date.