3.7 - Intro to credit cards

What is one advantage of having a credit card?

• It prevents you from spending more than you earn.
• It allows you to make purchases without carrying lots of cash.
• It encourages you to budget your money wisely.
• It helps you pay off debts that you may have.

What happens when you don't have enough money to pay for the things you charged?

• You end up owing less than the original amount of money you charged.
• You end up owing more than the original amount of money you charged.
• You end up owing the same amount of money you charged, it just takes a while to pay off.

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Why would your credit provider give you a credit limit?

• To remind you to pay your bill on time.
• To prevent you from enjoying the things you buy.
• To prevent you from spending more money than you can pay back.
• To prevent you from shopping in certain places.

When you make a credit card purchase at a store, who do you agree to pay?

• The store.
• The bank where the store keeps its money.
• Your credit provider.

How do credit card companies make money?

• By charging late fees and interest to their customers.
• By making you pay an extra dollar on every purchase.
• By charging late fees and interest to stores and other businesses.
• By earning interest on the money they have saved up.

How is charging a purchase like getting a loan?

• You borrow money from your credit provider.
• You borrow money from the store in order to pay your credit provider.
• You borrow money from an ATM in order to pay your credit provider.

The cost of credit expressed as a yearly interest rate is known as:

• Annual Percentage Rate (APR)
• Annual Fee
• Penalty APR
• Introductory Rate

Benefits of credit cards include:

• safe and convenient, bonuses are offered
• allows you to build a positive credit report
• needed for reservations and online shopping
• all of these

The maximum amount you may borrow on a credit card is known as:

• creditworthiness
• credit report
• credit limit
• variable rate of credit

What is an annual fee? 

• The act of transferring money 
• A fee charged by a card issuer for being a card holder. 
• The days between the last statement and the current statement. 
• A fee charged to a cardholder's account once a payment is late.