Intro to Credit Cards

Sarah will turn 18 next month. She plans to apply for a credit card. Which statement is true?

• Sarah cannot obtain a credit card until she turns 21.
• Sarah will need to use a special application since she is under 25.
• Sarah can only obtain a credit card if she has a co-signer or proof of sufficient income to make the required payments. 
• Sarah can obtain a credit card by filling out an application as long as she waits until after her 18th birthday. 

Paying the minimum payment on a credit card every month will:

• Pay a large percentage of the total balance owed every month
• Make the final amount paid substantially higher than the amount initially charged to the card
• help the cardholder create a plan for paying of a credit card in a decent amount of time
• allow the cardholder to avoid paying any interest charges 

Megan’s credit card statement indicates that she is now paying a Penalty APR. Which scenario bestdescribes what may have happened?

• Megan’s missed making her January and February credit card payments while she wasparticipating in her college’s Study Abroad program when the friend she left in charge of sending the payments in forgot.
• Megan’s credit card payment has been paid in full each of the last 6 months.
• Megan’s card had a lower introductory interest rate for the first year and now the interestrate has increased, as stated on her contract.

The cost of credit expressed as a yearly interest rate is known as:

• Annual Percentage Rate (APR)
• Annual Fee
• Penalty APR
• Introductory Rate

A pre-approved amount of money which can be used for the purchase of goods and services now and payment of them later

• Credit Card
• Debit Card
• Lender
• Borrower

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A record of a person's credit history that includes information about credit cards as well as the use of other types of credit and loans

• Credit Report
• Credit Score
• Credit Card
• Introductory Rate

Increased interest rate if the credit card holder breaks the terms of the card contract

• Penalty Fee
• Returned Payment Fee
• Annual Fee
• Foreign Transaction Fee

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Annual Percentage Rate (APR) is the yearly percentage rate of the finance charge. 

• True
• False 

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An interest rate is? 

• A low interest rate offered for a limited time by a company. 
• The yearly percentage rate of the finance charge. 
• The amount of interest charged to an account for the billing cycle. 
• The money you gain after paying your bills.

What can you purchase with a good credit score?

• House 
• Car
• Loan
• All of the above