Credit Card Basics for Beginners

What is a major risk for beginners using credit cards?

• Earning too many rewards

• Falling into high-interest debt

• Having too high of a credit score

• Spending too little

Why is it important to have an emergency fund when using credit cards?

• To earn more interest on savings

• To cover unexpected expenses without relying on credit

• To increase credit card limits

• To avoid paying taxes

How should you ideally treat your credit card to avoid overspending?

• As a gift card

• As a debit card

• As a source of free money

• As a long-term loan

What is a benefit of treating your credit card like a debit card?

• You get higher credit limits

• You can skip payments

• You avoid interest charges by paying in full

• You can spend more than you have

What is a common myth about carrying a balance on a credit card?

• It extends the payment due date

• It reduces interest rates

• It helps improve your credit score

• It increases cashback rewards

Why is it important to pay off your credit card balance in full each month?

• To earn more rewards

• To extend the billing cycle

• To avoid interest charges

• To increase your credit limit

What is credit utilization?

• The total amount of credit available

• The percentage of credit used compared to the limit

• The number of credit cards owned

• The interest rate on a credit card

What is the recommended credit utilization percentage to maintain a good credit score?

• Above 50%

• Below 30%

• Exactly 50%

• Above 70%

What is the impact of missing a credit card payment on your credit score?

• It improves your credit score

• It increases your credit limit

• It negatively impacts your credit score

• It has no effect

How long can a missed payment affect your credit report?

• 7 years

• 1 year

• 3 years

• 5 years