PF: Chapter 4 Lesson 4 The Truth About Credit Cards

What is one reason why people end up overwhelmed by credit card debt?

• They make promises to themselves that they don't keep

• Credit card companies charge high interest rates

• They don't have a job or a good credit score

• They forget to make their credit card payments

How do credit card companies make money?

• By charging interest, cardholder fees, and transaction fees

• By giving out free credit cards

• By offering low introductory rates

• By providing perks like airline miles

What is a cash advance fee?

• A fee charged when you withdraw money from an ATM

• A fee charged when you transfer a balance from one credit card to another

• A fee charged when you make a late payment

• A fee charged when you go over your credit limit

Why do credit card companies charge annual fees?

• To cover the costs of perks like airline miles

• To make more money from their customers

• To discourage people from using credit cards

• To provide better customer service

What happens if you spend over your credit limit?

• You have to pay a penalty

• You can continue using your credit card without any consequences

• You will receive a cash advance fee

• You will be charged a late payment fee

What is the closest thing to using cash when making purchases?

• Using a credit card

• Using a debit card

• Using a check

• Using a mobile payment app

What did the CARD Act of 2009 do?

• Put limits on credit card tactics

• Allowed credit card companies to hide fees

• Lowered the interest rates on credit cards

• Made it easier for college students to get credit cards

Can a debit card do everything a credit card can do?

• Yes, except go into debt

• No, debit cards have more limitations

• Yes, but with higher interest rates

• No, credit cards are more secure

Are credit cards more secure than debit cards?

• Yes, credit cards have better fraud and security protections

• No, debit cards have the same fraud and security protections

• Yes, credit cards have lower transaction fees

• No, debit cards have higher interest rates

What is the main disadvantage of using credit cards?

• They make it easier to overspend and go into debt

• They have higher interest rates than other forms of borrowing

• They have hidden fees that can add up quickly

• They are not widely accepted by merchants