Understanding Credit Cards for Students

Sophia wants to buy a new laptop but doesn't have enough cash at the moment. What is the primary purpose of using a credit card in this situation?

• To store money

• To borrow money for purchases

• To earn interest

• To transfer funds between accounts

Charlotte is considering getting a credit card. Which of the following is a common feature she should expect?

• Fixed interest rate

• Grace period for payments

• Unlimited credit limit

• No annual fees

David wants to know what the term is for the maximum amount he can charge on his credit card. What is it?

• Credit score

• Credit limit

• Credit balance

• Credit report

Olivia is trying to improve her credit score. Which of the following is NOT a factor that affects her credit score?

• Payment history

• Amount of debt

• Number of credit inquiries

• Your age

Avery forgot to pay her credit card bill on time. What is the typical consequence she might face?

• Increased credit limit

• Lower interest rate

• Late fee charge

• Improved credit score

Evelyn recently received her credit card statement and noticed a charge for interest on her unpaid balance. What is the term for the interest rate charged on unpaid credit card balances?

• Annual Percentage Rate (APR)

• Credit utilization rate

• Fixed rate

• Prime rate

Ava has just received her first credit card and is determined to use it wisely. Which of the following is a benefit she can achieve by using her credit card responsibly?

• Accumulating debt

• Building a positive credit history

• Paying high interest rates

• Increasing financial risk

Arjun has a credit card with a high interest rate and wants to reduce his monthly payments. What is a balance transfer in the context of credit cards?

• Moving funds from a savings account to a credit card

• Transferring debt from one credit card to another

• Paying off a credit card with cash

• Receiving a cash advance from a credit card

Rohan received his credit card bill and is wondering what the term is for the minimum amount he must pay each month. What is it called?

• Minimum payment

• Full balance

• Interest charge

• Credit limit

Avery recently got her first credit card. Which of the following is a potential disadvantage she might face?

• Earning rewards points

• Building credit history

• Overspending and accumulating debt

• Convenience in transactions