Credit Card Quiz

What does a credit card represent?

• A personal identification card

• A prepaid spending card

• A line of credit

• A discount membership card

How is a credit card different from a debit card?

• With a credit card, you are using the bank's money each time you make a purchase.

• With a credit card, you are using your own money from a prepaid account.

• With a credit card, you get discounts on every purchase.

• With a credit card, you can only withdraw cash from ATMs.

Why can credit cards be considered dangerous?

• They offer unlimited funds.

• They are difficult to obtain.

• They can lead to serious debt.

• They discourage spending.

What is one reason credit cards are easy to abuse?

• They require immediate payment.

• They are only issued to high-income individuals.

• They allow you to buy things you can't afford.

• They come with low-interest rates.

On average, how many credit cards does a credit card holder in the U.S. have?

• Two

• Four

• Six

• Eight

How much does the average household in the U.S. owe in credit card debt?

What is an annual fee in the context of credit cards?

• The cost of the rewards program associated with the credit card

• The money that you have to pay every year for using the credit card

• The interest charged on purchases made with the credit card

• A one-time payment required to open a new credit card account

What does APR stand for in relation to credit cards?

• Annual Payment Requirement

• Automated Payment Rate

• Annual Percentage Rate

• Approved Purchase Rate

Why are credit card APRs considered to be very high?

• Because they include all the fees and penalties

• Because they are set by the government

• Because they are normally very high, making it very expensive to have a balance

• Because they are compounded daily instead of annually

What is one of the advantages of using a credit card responsibly?

• Increased interest rates on savings

• Lost or Stolen Safeguards

• Higher borrowing limits on loans

• Decreased credit score