Credit Cards

What is a credit card?

• A credit card is a form of transportation

• A credit card is a musical instrument

• A credit card is a payment card issued to users to enable the cardholder to pay a merchant for goods and services based on the cardholder's promise to the card issuer to pay them for the amounts plus the other agreed charges.

• A credit card is a type of fruit

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How does a credit card differ from a debit card?

• A credit card deducts funds directly from a bank account, while a debit card allows borrowing money.

• A credit card has no spending limit, while a debit card does.

• A credit card and a debit card are the same thing.

• A credit card allows borrowing money, while a debit card deducts funds directly from a bank account.

What is the importance of having a good credit score when using a credit card?

• A good credit score leads to higher annual fees on credit cards

• Having a good credit score is irrelevant when using a credit card

• Credit card companies prefer customers with low credit scores

• Having a good credit score is important when using a credit card because it affects interest rates, credit limits, and overall creditworthiness.

What are the potential risks of using a credit card?

• No risk of overspending

• High interest rates, overspending, identity theft, fraud, damaging credit score

• Enhanced credit score

• Low interest rates

Explain the concept of credit card interest rates.

• Credit card interest rates are fixed and never change

• Credit card interest rates are only applied to purchases made on weekends

• Credit card interest rates are determined by the weather conditions in the cardholder's location

• Credit card interest rates are the cost of borrowing money from the credit card issuer, expressed as an annual percentage rate (APR) applied to the outstanding balance.

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What is a credit limit on a credit card?

• The credit limit is the annual fee associated with the card

• The credit limit on a credit card is the maximum amount of money a cardholder can borrow on the card.

• The credit limit is the interest rate charged on the card

• The credit limit is the number of rewards points earned on the card

What are some common fees associated with credit cards?

• monthly fees

• application fees

• annual fees, late payment fees, cash advance fees, balance transfer fees, foreign transaction fees

• overdraft fees

How can someone build good credit history with a credit card?

• Apply for multiple credit cards in a short period

• Ignore making payments

• Max out the credit card limit

• Make on-time payments, keep credit utilization low, and maintain a healthy mix of credit accounts.

What should you do if your credit card is lost or stolen?

• Throw a party to celebrate

• Ignore it and hope it magically reappears

• Post about it on social media

• Contact your credit card issuer to report it and request a replacement card.

Why is it important to review your credit card statements regularly?

• To detect unauthorized charges, errors, or fraudulent activity.

• To improve your cooking skills

• To learn a new language

• To practice mindfulness