Credit Cards

What is one advantage of having a credit card?

• It prevents you from spending more than you earn.
• It allows you to make purchases without carrying lots of cash.
• It encourages you to budget your money wisely.
• It helps you pay off debts that you may have.

Why would your credit provider give you a credit limit?

• To remind you to pay your bill on time.
• To prevent you from enjoying the things you buy.
• To prevent you from spending more money than you can pay back.
• To prevent you from shopping in certain places.

When you make a credit card purchase at a store, who do you agree to pay?

• The store.
• The bank where the store keeps its money.
• Your credit provider.

How do credit card companies make money?

• By charging late fees and interest to their customers.
• By making you pay an extra dollar on every purchase.
• By charging late fees and interest to stores and other businesses.
• By earning interest on the money they have saved up.

How is charging a purchase like getting a loan?

• You borrow money from your credit provider.
• You borrow money from the store in order to pay your credit provider.
• You borrow money from an ATM in order to pay your credit provider.

What is a credit card? 

• a small plastic card issued by a bank, business, etc., allowing the holder to purchase goods or services on credit.
• A card that has a set balance that you can only use at one place.
• A card with the money from your checking account. 

What is an annual fee? 

• The act of transferring money 
• A fee charged by a card issuer for being a card holder. 
• The days between the last statement and the current statement. 
• A fee charged to a cardholder's account once a payment is late. 

What is a finance charge?

• The amount of interest charged to an account for the billing cycle. 
• A fixed annual percentage rate of the finance charge.
• A charge from the bank for getting a credit card. 
• None of the above. 

What is a grace period?

• The time allowed to pay your balance with a low interest rate 
• The time frame to spend as much money as you can.
• The time allowed to pay your balance without being charged. 

Annual Percentage Rate (APR) is the yearly percentage rate of the finance charge. 

• True
• False