Ch. 4 Credit Card Review for Fall Final Exam

To avoid being charged for unauthorized fees or sales by a credit card company, customers should

• save their credit card sales slips and compare them with their credit card statement.

• check that all payments appear on their credit card statement.

• check that any purchase returns appear on their credit card statement.

• all of the above

A grace period allows you to avoid paying finance charges if you pay your credit card balance in full by the due date.

• True

• False

If a monthly periodic rate is used, divide the Annual Percentage Rate (APR) by 12.

• True

• False

Tags

CCSS.6.RP.A.3C

If a daily periodic rate is used, divide the Annual Percentage Rate (APR) by 365.

• True

• False

Tags

CCSS.3.NF.A.3C

Which of the following is the most common method for calculating finance charges on a credit card?

• adjusted balance method

• average daily balance method

• mean balance method

• previous balance method

Tags

CCSS.7.RP.A.3

Which of the following reasons might be used to discourage a friend from getting a cash advance on a credit card?

• interest charges begin accumulating immediately

• payments are applied to any purchase balance before the cash advance balance creating higher finance charges

• the interest rate for cash advances is higher than for purchases

• all of the above

Total finance charges include both periodic finance charges and fees charged.

• True

• False

Tags

CCSS.7.RP.A.3

Which of the following is NOT a strategy for managing or reducing debt?

• Use a debit card instead of cash.

• Transfer high interest credit card balances to lower interest accounts.

• Pay more than the minimum payment on credit cards.

• Pay off credit cards with the highest interest rates first.

Which of the following is NOT a factor that influences an indvidual's credit score?

• debt-to-income ratio

• length of credit history

• amounts owed to creditors

• payment history

A consolidation loan is money that is borrowed to pay off all of your debts.

• True

• False