Credit Card Vocabulary

What is one advantage of owning a credit card?

• Purchase items and services without carrying large amounts of cash or a checkbook

• No monthly bills to pay

• You can spend more money with a credit card

• Credit cards are safer than cash

What is a retail credit card?

• A card for purchasing only groceries

• A card that should never be used

• A credit card issued by a specific store or retailer that can only be used there

• A card accepted as payment for products or services at any store

True of False: Some credit cards have annual fees charged to consumers who wish to use the cards.

• True

• False

Define grace period

• A day to behave with grace

• The date the payment on the credit card is due

• A period of time between the time the credit card statement is closed and the date payment is due

• A period of time when no charges can be added to credit card. In other words, a period of time when the card cannot be used to purchase products or services

True or False: Credit card debt should be paid before other debt

• True

• False

Which is not likely to be asked on a credit card application?

• What is you monthly income? (cash inflows)

• What year were your parents were born?

• How much do you spend monthly? (cash outflows)

• Do you have money in a savings account to cover future payments?

Define credit limit

• The amount of money equal to the amount in your savings account

• The minimum amount a consumer must spend every month

• The maximum amount of credit the consumer is allowed

• There is no such thing as credit limit

Which is not a type of interest rate?

• Variable rate

• Tiered rate

• Credit rate

• Fixed rate

What kind of consumer might be offered a prestige card?

• An unemployed consumer

• A consumer who has more than three credit cards

• Someone who uses their card often and pays it off every month

• Someone who owns a truck

Define cash advance

• Finding money on the sidewalk

• ATM withdrawals

• The amount you owe on your credit card

• Interest the credit card company pays the consumer for using their card