How Does a Credit Card Work? (from YouTube video)
Authored by Brett HARRISON
Mathematics, Social Studies, Special Education
4th - 12th Grade
CCSS covered
Used 2+ times
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10 questions
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1.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
A credit card is a way to get...
free money
a loan - it must be paid back
things for free
money from your bank account
Answer explanation
A credit card is a short-term LOAN ! The money must be paid back. Because the bank charges you interest and fees, the longer you take to pay it back, the more it will cost you!
2.
MULTIPLE SELECT QUESTION
2 mins • 1 pt
When you buy things with a credit card, do you have to pay for them? (there may be more than 1 correct answer)
yes, it's a LOAN
no, it's free money
yes, the sooner the better
yes, but you can do it years later
Answer explanation
A credit card can give you an instant loan. The bank charges more interest on credit cards than anything else. So it's better to pay it back as soon as you can!
3.
MULTIPLE SELECT QUESTION
2 mins • 1 pt
What 3 important things does a credit card statement tell you? (pick 3)
Total Amount Due (owed)
Minimum Payment Due (owed)
The DATE when the Minimum Payment is Due
Your birthday
How much you should be spending
Answer explanation
TOTAL AMOUNT DUE, MINIMUM PAYMENT, and WHEN THE MINIMUM PAYMENT IS DUE are the 3 important things you need to know!
4.
MULTIPLE SELECT QUESTION
2 mins • 1 pt
When you get your credit card statement, you should do 1 of 2 things: _____________________ OR ______________________
(pick 2 from the list)
Pay the FULL AMOUNT DUE
Pay the MINIMUM AMOUNT DUE, or more if you can
GET ANOTHER credit card
IGNORE the statement
Pay a couple of dollars to get them off your back
Answer explanation
Paying the FULL AMOUNT DUE is best - that way, you don't pay any more interest. If you can't afford that, pay the MINIMUM AMOUNT or a bit more.
5.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
If, each month, you pay ONLY the Minimum Amount Due, the bank will....
charge you INTEREST on the rest that you owe
charge you NO INTEREST
ignore you
ask you to pay more
Answer explanation
If you pay only the MINIMUM AMOUNT DUE, you will pay interest on the amount you still owe them. This can get big quickly!
6.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Credit card interest rates in Australia are higher than shown in the video, around 21% per annum for most banks. This is a very high interest rate, which means....
it's easy get into more debt (owe the bank more and more)
nothing
you don't owe the bank much
you can spend as much as you want with a credit card and not do anything about it
Answer explanation
Banks make a lot of money from credit card interest - be careful!
Tags
CCSS.RI.4.7
CCSS.RI.5.7
CCSS.RI.6.7
CCSS.RI.7.7
CCSS.RL.7.7
7.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Banks charge INTEREST on loans, including credit cards. This means that...
you have to pay back MORE than you borrowed
you have to pay back LESS than you borrowed
you have to pay back the same amount that you borrowed
you don't have to pay anything back
Answer explanation
Banks make money by charging you extra when you borrow money. With credit cards, they charge a LOT extra, especially if you don't pay them back on time.
Tags
CCSS.7.RP.A.3
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