Understanding Credit Card Basics

Front

What is the primary purpose of the annual percentage rate (APR) on a credit card?

Back

To calculate the interest on unpaid balances

Front

Which of the following is a benefit of using a credit card responsibly? Accumulating high-interest debt, Improving your credit score, Increasing your credit limit automatically, Avoiding all types of fees

Back

Improving your credit score

Front

How does a high credit score impact your credit card options?

Back

It provides access to better credit card offers.

Front

What is a common disadvantage of using credit cards?

Back

Paying high-interest rates on unpaid balances

Front

Which feature of a credit card agreement specifies the time frame during which you can pay your balance without incurring interest?

Back

Grace period

Front

What is the Schumer box used for in credit card agreements?

Back

To outline key terms and fees

Front

Which type of credit card typically requires you to load funds onto it before use?

Back

Pre-paid card

Front

How can understanding your credit limit help you manage your credit card usage?

Back

It allows you to avoid exceeding your limit and incurring fees

Front

What is a finance charge on a credit card?

Back

The interest charged on unpaid balances

Front

Which of the following is a type of credit card that offers lower interest rates for transferring balances from other cards? Rewards card, Balance transfer card, Pre-paid card, Secured card

Back

Balance transfer card