Credit Card Basics for Beginners

What is the first lesson for credit card beginners mentioned in the text?

• To use credit cards for all expenses

• To apply for multiple credit cards

• To ignore credit card statements

• To have an emergency fund in place

Why is having an emergency fund important when using credit cards?

• It allows you to spend more freely

• It helps you pay off unexpected expenses

• It increases your credit limit

• It reduces your interest rate

What is the mindset shift suggested for using credit cards?

• Treat your credit card like a debit card

• Use credit cards only for large purchases

• Always carry a balance on your credit card

• Ignore your credit card limit

What should you do to avoid paying interest on credit cards?

• Ignore the APR

• Use a different credit card each month

• Pay only the minimum payment

• Pay off your balances in full every month

What is the consequence of not having an emergency fund?

• You can easily pay off your credit card

• You might rely on future cash flows to pay off credit card balances

• You will have a higher credit score

• You can avoid unexpected expenses

What is the benefit of substituting a debit card with a credit card?

• You get a higher credit limit

• You avoid all fees

• You can spend more than you have

• You earn points or cashback

What is the impact of carrying a credit card balance?

• It improves your credit score

• It leads to high interest charges

• It increases your credit limit

• It reduces your monthly expenses

What should you do if you have a large unexpected expense?

• Use a credit card and pay it off immediately

• Apply for a new credit card

• Ignore the expense

• Wait until you have enough cash

What is the problem with viewing credit as 'the bank's money'?

• It encourages responsible spending

• It leads to overspending and debt

• It helps build credit history

• It reduces interest rates

What is the recommended action if your income decreases?

• Ignore your credit card bills

• Have a cash safety net to fall back on

• Increase your credit card spending

• Rely on credit card debt