Unit 8/9 Review - Credit

If you want a credit card for emergency use only, what should you look for in a credit card?

• Good reputation and security

• Accepted worldwide and customizable appearance

• Low interest rates and fees

• Large limits and reward programs

A person should choose a credit card based on the way he plans on using it. James intends to use a card for everyday purchases such as groceries, gasoline, and entertainment. He has good budgeting habits, and is confident he will pay off balances each month and mind credit limits. Given this information, which of the following would be the best factors to prioritize when deciding between cards?

• Good reputation and security

• Accepted worldwide and customizable appearance

• Low interest rates and fees

• Large limits and reward programs

What are the three major CRAs (credit bureaus) that maintain credit reports?

• Equifax, TransUnion, Experian

• Equifax, TransAmerica, Expedia

• Expedia, the FTC, TransUnion

• Experian, the FTC, Equifax

Given the fact that a credit card balance can change every day, which of the following best describes how interest is calculated?

• Interest is calculated yearly using the total amount spent that year.

• Interest is calculated monthly but only on the carry-over balances.

• Interest is calculated monthly using the total amount spent that month.

• Interest is calculated using average daily balances.

A person only gets charged interest if he doesn’t pay his balance in full each month.

• True

• False

CRAs only care about a person’s total overall credit usage and want it to be below 30 percent. They don’t care what the ratio is for individual accounts.

• True

• False

Which of the following is NOT a tip for responsible credit card use?

• Find a card with no annual fee

• Pay the minimum payment each month

• Avoid high balances

• Don’t use the card for cash advances

Who are credit card companies’ most profitable customers?

• Customers who pay their full balances each month

• Customers that never pay on time, if at all.

• Customers that pay the minimum payment each month.

• Customers that they have to send to a collection agency.

Shopping safely online consists of all of the following EXCEPT

• Double checking the URL to ensure it is the intended site

• Making sure the web address has an https

• Only shopping on sites that have a lock icon in the address bar

• Logging in to Paypal when using public Wi-Fi

Whose responsibility is it to prove the accuracy of items appearing on a credit report?

• The CRA (credit bureau)

• The vendor who reported it

• The FTC (Federal Trade Commission)

• The bank considering the report