Account Managment: Credit Crad and Debit card

You will be charged interest for using a debit card.

• True

• False

Using a credit card is most like:

• a) Writing a check

• b) Taking money from savings

• c) Paying with cash

• d) Receiving a loan

When using a credit card, the best way to avoid paying interest fees is to pay off the balance in full each month.

• True

• False

For an additional fee, you can use your credit card to receive cash. This is called a:

• a) Cash Refund

• b) Cash Bonus

• c) Cash Advance

• d) Cash Debit

You need not worry in case your debit card is lost or stolen, since it can never be used for unauthorized purchases.

• True

• False

For regular credit cards (or unsecured credit cards), a cash deposit must made initially to serve as collateral.

• True

• False

Consuela’s credit card was stolen and used to purchase a flat-screen TV worth $500. According to the Fair Credit Reporting Act, what is the maximum liability for which Consuela will be responsible?

• a) $50

• b) $100

• c) Half the cost of the TV.

• d) The total cost of the TV.

Simon has a secured credit card with a $700 limit. He wants to purchase a $500 camera that is on sale for only $375. Which is the best option he can take to make the purchase?

• a) Pay for the camera in cash.

• b) Pay for the camera using his credit card.

• c) Pay for the camera using a debit card.

• d) Consult his budget to make sure he can afford to make the purchase now.

Blake has forgotten that he only has $40 in his bank account. Using his debit card, he spends $25 at the grocery store and selects the $20 cash back option. What could happen in this situation? More than one answer may be correct.

• a) He could get an overdraft charge.

• b) He could be charged interest for the purchase.

• c) His transaction could be declined.

• d) His debit card could be taken by the cashier

What are the best steps Blake can take in the future to avoid being overdrawn on his checking account?

• a) Sign up for overdraft protection, if his bank offers it.

• b) Always be on top of his bank balance.

• c) Keep a certain amount of money in the bank.

• d) Pay everything via credit card instead.