Credit Card & Fraud Review

Megan’s credit card statement indicates that she is now paying a penalty APR. Which scenario best describes why?

• Megan 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.
• 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 interest rate has increased, as stated on her contract.
• 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.

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 off a credit card in a decent amount of time.
• allow the cardholder to avoid paying any interest charges.

Tyler 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?

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

Carson’s wallet with his driver’s license, a debit card, and his credit card has been stolen. Which is not something an identity thief might realistically do with this information?

• Rent an apartment under Carson’s name
• Use Carson’s name during an arrest
• Make purchases with Carson’s credit card
• Take a college admissions exam in Carson’s name

Which is an act of identity theft?

• Receiving permission to use a parents’ credit card for school clothes
• Wrongfully acquiring and using someone’s personal identification
• Taking the identity of another individual as inspiration for a costume
• Having the same name as another person

Which action will not make an individual vulnerable to identity theft?

• Using a computer without updated spyware protection
• Responding to an email from one’s depository institution
• Paying cash for a movie ticket
• Throwing mail in the garbage

Which is a general rule when dealing with credit reports to minimize identity theft?

• Check each credit report at least once per year.
• Wait 60 days before disputing any wrong information found in a credit report or on a credit card statement.
• Keep credit reports in an easily accessible location, so information can be accessed if fraud occurs.
• Report mistakes to only one credit reporting agency and they will inform the others.

Matt wants to guard his personal information. Which personal information is least likely to be used by scammers?

• Phone numbers
• Credit card numbers
• Bank account numbers
• Driver’s license numbers

Charis wants to decrease the risk of fraudulent use of her credit cards. Which strategy would be the most effective?

• Carrying all credit cards in her wallet so they do not get lost
• Signing the back of her card with her signature and “Please see picture ID”
• Giving account numbers over the Internet rather than over the phone
• Using credit cards for all her purchases so she only needs to pay one bill each month

What does APR stand for?

• Annual Profit Return
• Always Pay Receipts
• Annual Percentage Rate
• All Places Required