Personal Finance 6.3

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

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

Tony is trying to be responsible in using his new credit card and has heard there is a way to avoid paying interest on the things he charges. How can he LEGALLY avoid paying interest when using his credit card?

• Tony needs to make sure he pays the minimum balance every month before the due date on the credit card statement.
• Tony needs to limit the use of his credit cards to balance transfers only.
• Tony a.  needs to pay the credit card balance in full every month before the due date listed on the credit card statement.
• Tony needs to understand that the use of a credit card requires paying interest. There is not legal way for him to avoid paying interest if he uses his card during the billing cycle.

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

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

Mia's credit card statement indicates that she is now paying a Penalty APR. Which scenario best describes what may have happened?

• Mia's credit card payment has been paid in full each of the last 6 months.
• Mia's card had a lower introductory interest rate for the first year and now the interest rate has increased, as stated on her contract.
• Mia's missed making her January and February credit card payments while she was participating in her college’s Study Abroad program when the friend she left in charge of sending the payments in forgot.
• The new computer Megan purchased made her account go over the credit limit for 1 week, until the credit card company processed her credit card statement.