WorksheetsAverage Credit Card Debt in the United States
Total questions: 64
Worksheet time: 35mins
What was the average credit card debt in the United States in 2022?
$5,441
$5,939
$6,569
$7,872
Which ranking corresponds to the state with the highest average credit card debt according to the image?
#43
#50
#1
#25
What is the average credit card debt of the state ranked #50?
$5,441
$5,939
$6,569
$7,872
What is the average credit card debt of the state ranked #1?
$5,441
$5,939
$6,569
$7,872
What is the average credit card debt of the state ranked #43?
$5,441
$5,939
$6,569
$7,872
What is the first step in using credit according to the image?
Pay back the loan with interest
Buy the things you want
Borrow the money (with credit card or loan)
Save money for future purchases
What must you do when you use credit to make a purchase?
Pay back the loan later with interest
Exchange goods instead of paying with money
Never pay back the borrowed money
Only purchase items on sale
According to the image, what can you do after borrowing money with credit?
Start a new business
Buy the things you want
Invest in the stock market
Donate to charity
What type of credit can be used repeatedly up to a certain limit?
Auto loan
Home loan (mortgage)
Credit Cards
Home Equity Line of Credit (HELOC)
Which of the following is an example of closed-end credit?
Credit Cards
Home Equity Line of Credit (HELOC)
Home loan (mortgage)
Personal loan with flexible repayment
What does HELOC stand for?
Home Equity Line of Credit
Home Equity Loan Corporation
High Earnings Line of Credit
Home Evaluation Line of Credit
Which type of credit has an end point and is paid back in equal payments over time?
Open-End
Closed-End
Revolving Credit
Installment Credit
What type of credit allows you to borrow funds repeatedly up to a certain limit?
Closed-End Credit
Open-End (Revolving) Credit
Installment Credit
Secured Credit
With Open-End (Revolving) Credit, who decides the amount that is borrowed and paid back each month?
The credit card company
The government
The borrower
The bank
What is the definition of 'Credit Limit'?
What happens if you don't repay the full amount on credit cards and store cards?
You lose the credit card
You pay interest on the money owed
You have unlimited borrowing
The debt is forgiven
What is a Personal Line of Credit primarily used for?
To have a fixed amount of money to spend each month
To borrow a lump sum of money to be paid back in installments
To access a set amount of money when needed
To invest in stocks and bonds
What is the collateral in a Home Equity Line of Credit (HELOC)?
Your car
Your home
Your credit card
Your personal belongings
What is the primary difference between credit cards and debit cards?
Credit cards allow you to borrow money to be repaid later, while debit cards take money directly out of your bank account.
Credit cards allow you to earn rewards, while debit cards do not.
Credit cards have a credit limit, while debit cards do not.
There is no difference; both cards function in the same way.
Do credit cards charge interest?
Yes
No
Only if reported within 2 days
Only with an annual fee
What is the liability protection for debit cards if reported within 2 days?
$0 liability protection
$50 max
Up to $500 within 60 days
Some offer insurance or warranties on purchases
Can debit cards help build credit history?
Yes
No
Only with an annual fee
Only if they offer rewards
What type of fees are associated with credit cards for late payments?
Overdraft
Late payments
Annual fee
No fee
Do credit cards offer rewards?
Yes
No
Only with an annual fee
Only if liability is reported in a timely manner
What is the maximum liability for unauthorized debit card transactions if reported within 60 days?
$0 liability protection
$50 max
Up to $500
Some offer insurance or warranties on purchases
How do you get reimbursement for unauthorized transactions with debit cards?
Some offer insurance or warranties on purchases
$50 max if reported within 2 days
Must deal directly with merchant
$0 liability protection if reported in timely manner
Do credit cards have an annual fee?
Yes
No
Yes/No
Only if they offer rewards
Which of the following is NOT listed as a pro of credit cards according to the slide?
Helps build good credit
Don't need cash, convenient
Can be free to use
What is one of the benefits of using credit cards for reservations as mentioned in the slide?
Discounts on reservations
Free reservation cancellations
Automatic reservation upgrades
According to the slide, how do credit cards provide financial security?
High interest rates
No spending limits
Mandatory insurance coverage
What is a convenience mentioned in the slide that credit cards offer?
Lower transaction fees
No need for a bank account
Automatic money saving
Which of the following is a benefit of credit cards that can help in difficult financial situations as per the slide?
Investment opportunities
Unlimited credit supply
Debt forgiveness programs
What is one of the cons of credit cards according to the learning material?
They offer unlimited funds
They can lead to temptation to spend more than one can afford
They always have low interest rates
They automatically improve your credit score
What can be a financial consequence of using credit cards as mentioned in the learning material?
Fees and interest can be minimal
Fees and interest can be expensive
There are no fees or interest
They provide cashback on all purchases
What is a potential risk of credit card usage as per the learning material?
Guaranteed financial stability
Potential for debt
Increased savings
No financial risk
How can misuse of credit cards affect your credit score according to the learning material?
It can significantly increase your credit score
It has no effect on your credit score
It can destroy your credit score
It can convert your credit score into reward points
What is the Purchase Annual Percentage Rate (APR) mentioned in the document?
19.24%
15.99%
29.99%
None of the above
Under what conditions will the Penalty APR be applicable?
If you exceed your credit limit
If you fail to make any Minimum Payment by the due date (late payment)
If you make a payment that is returned
All of the above
How can you avoid paying interest on purchases?
By paying your entire balance by the due date each month
By making a minimum payment
By transferring the balance to another account
By taking a cash advance
What is the Schumer Box used for?
Calculating interest rates
Comparing credit cards
Tracking credit card payments
Reporting credit card fraud
Which of the following is NOT listed in the Schumer Box for comparing credit cards?
Rewards
Credit limit
APR
Annual fee
What is the Annual Percentage Rate (APR) for purchases after the initial 7-month period according to the CARD DISCLOSURES?
0.00%
17.24% variable
25.24% variable
29.99% variable
What is the APR for cash advances?
Prime Rate plus 13.99%
Prime Rate plus 21.99%
25.24% variable
29.99% variable
How long is the grace period for repayment of the balance for purchases if the total balance is paid in full by the due date?
No grace period
20 days
7 months
29.99% of the period
What does the default APR equal to?
The U.S. Prime Rate plus 13.99%
The U.S. Prime Rate plus 21.99%
The greater of (1) the U.S. Prime Rate plus up to 23.99% or (2) up to 29.99%
25.24% variable
What is the method of computing the balance for purchases according to the Schumer Box?
Monthly balance
Average daily balance including new purchases
Fixed periodic balance
Rotating balance method
What is the minimum finance charge listed in the Schumer Box?
$1.00
50 cents
$5.00
No minimum finance charge
Are there any annual fees associated with the credit card as per the Schumer Box?
$100
$50
None
$25
What is the fee for foreign purchases according to the Schumer Box?
2% of the U.S. dollar amount of each purchase
3% of the U.S. dollar amount of each purchase made outside the U.S.
5% of the U.S. dollar amount of each purchase
No fee for foreign purchases
What is the late fee for a balance of $250 and over as per the Schumer Box?
$15
$29
$39
$45
What item on a credit card statement indicates the total amount you owe?
APR
Balance
Due date
Rewards balance
Which term refers to the smallest amount you can pay by the due date to avoid penalties on your credit card?
Minimum payment due
Late fee
Cash advance APR
Credit limit
What is the term for the fee charged if a credit card payment is made after the due date?
Balance
APR
Late fee
Billing period
What does APR stand for in the context of a credit card statement?
Annual Percentage Rate
Automated Payment Requirement
Additional Payment Requested
Approved Purchase Rate
What information on a credit card statement specifies the time frame for which the charges are being billed?
Billing period
Due date
Credit limit
Minimum payment due
What is the term for the maximum amount that can be borrowed on a credit card?
Rewards balance
Cash advance credit limit
Credit limit
Minimum payment due
What is the balance shown on the credit card statement?
$25.00
$119.07
$38.00
$5,000
What is the minimum payment due according to the credit card statement?
$119.07
$25.00
$38.00
$5,000
By what date is the payment due for the billing period Jun. 18, 2019 – Jul. 17, 2019?
Jun. 18, 2019
Jul. 17, 2019
Aug. 14, 2019
Jul. 18, 2019
What is the APR for the credit card as stated in the statement?
13.15%
20.24%
35,170
$13,000
How long will it take to pay off the balance if only minimum payments are made?
5 months
35,170 months
$5,000 months
$13,000 months
According to T.C.'s advice, what should you NOT do with your credit card to avoid interest charges?
Charge more than you can pay back
Pay the balance at the beginning of the month
Pay the balance at the end of the month
Pay on time
What is one of the recommendations given by T.C. to maintain good credit card habits?
Apply for many cards in a short period of time
Max out your card every month
Pay your credit card balance on time
Charge as much as possible
What should you avoid doing to prevent damaging your credit score according to T.C.'s Two Cents?
Paying the full balance every month
Using the credit card for small purchases
Applying for too many cards in a short period of time
Checking your credit score frequently
