ML Financial Literacy - Credit Cards

What is a credit card?

• A card used to withdraw money from an ATM

• A card used to make purchases by borrowing money from a bank or credit card company

• A type of savings account

• A card used to pay for only cash purchases

What does it mean to "charge" something to a credit card?

• To pay the full amount in cash at the time of purchase

• To borrow money from the credit card issuer to make a purchase

• To deposit money into your bank account

• To buy something online using your savings

What is the credit limit on a credit card?

• The maximum amount you can spend on a credit card

• The amount of money you have in your savings account

• The minimum payment required each month

• The annual interest rate on your card

What is the interest rate on a credit card called?

• Premium

• APR (Annual Percentage Rate)

• Credit Limit

• Monthly Payment

What is a minimum payment on a credit card?

• The maximum amount you can pay each month

• The lowest amount of money you must pay each month to avoid penalties

• The amount of money required to open a credit card

• The amount of money you can borrow on a credit card

What happens if you don’t pay your credit card bill on time?

• You earn rewards points

• You can be charged late fees and your interest rate may increase

• You will get extra credit to spend

• Your credit limit will be automatically increased

What is a credit card statement?

• A report showing how much money is in your savings account

• A report from the credit card company showing your charges, payments, and balance

• A document you need to sign to get approved for a credit card

• A bank loan agreement

What is a credit score?

• A score given by your bank to show how much money you have

• A number that represents how well you manage your credit and debts

• A list of items you can buy with your credit card

• The amount of money you earn each year

What is the purpose of a credit card rewards program?

• To offer money back or points for purchases made with the card

• To help you pay your bills

• To give you a loan without interest

• To increase your credit limit automatically

What is a cash advance on a credit card?

• A loan from your bank to cover expenses

• Withdrawing money from your credit card at an ATM or bank

• The amount of money you save when using a credit card

• A payment you make to the credit card company