Credit Card Basics Quiz

What is a Credit Card?

• A card that can only be used for online shopping.

• A card that provides discounts on all purchases.

• A card that allows you to deposit money for future use.

• A card that lets you borrow money up to a limit to make purchases.

What is the Credit Limit?

• The total amount of money you owe on your credit card.

• The interest rate charged on your balance.

• The maximum amount you can borrow on your credit card.

• The minimum amount you must pay each month.

What is the Minimum Payment?

• The total amount you owe on your credit card.

• The maximum amount you can borrow on your credit card.

• The smallest amount you are required to pay by the due date to avoid penalties.

• The interest rate charged on your balance.

What does APR stand for?

• Annual Penalty Rate

• Annual Payment Rate

• Annual Purchase Rate

• Annual Percentage Rate

What is a Billing Cycle?

• The period between billing statements, usually 28-31 days.

• The time it takes for a payment to process.

• The maximum amount you can borrow on your credit card.

• The total amount of money you owe on your credit card.

What is a Late Fee?

• A fee charged if you exceed your credit limit.

• A fee charged if you fail to make your payment by the due date.

• A fee charged for making multiple payments in a month.

• A fee charged for paying more than the minimum payment.

What is the best way to avoid paying interest on a credit card?

• Pay the minimum payment each month.

• Pay the full balance every month by the due date.

• Make multiple payments throughout the month.

• Keep your balance below 30% of your credit limit.

What is a Penalty APR?

• A lower interest rate for paying on time.

• A higher interest rate that may be applied if you make late payments.

• The standard interest rate for all credit card users.

• An interest rate applied only to new purchases.

Why is it important to pay more than the minimum payment if you can't pay in full?

• It allows you to skip the next month's payment.

• It increases your credit limit.

• It reduces the amount of interest you’ll pay over time.

• It automatically improves your credit score.

What is a good strategy to maintain a good credit score?

• Keep your balance below 30% of your credit limit.

• Apply for multiple credit cards at once.

• Ignore your billing statements.

• Only pay the minimum payment each month.