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WorksheetsCredit Card Basics Quiz
Total questions: 20
Worksheet time: 11mins
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.
Credit is free
True
False
Credit is _____
money you are given, and promise to pay back later.
money you borrow and promise to pay back later.
money you borrow and don't have to pay back later.
None of the above.
Which of the following statements is TRUE?
Assume that Josie has had this credit card for a year. The A.P.R. on her card will remain the same as long as she has the card.
If Josie misses a payment during the Introductory Period, her late payment fee will be waived for this period since she is a new customer.
Assume that Josie only uses her credit card to make purchases. She pays the balance on her credit card in full and on time every month. As a result, she pays no interest to the credit card company.
Josie pays an annual fee to use this credit card.
All of the following actions lead to the payment of a credit card fee EXCEPT...
Using your credit card to get cash from an ATM.
Using your credit card to purchase items in a foreign country.
Paying your credit card bill ten days after the Due Date.
Paying your credit card bill in full and on time every month.
Which of the following statements is TRUE:
Applying for several lines of credit in a short period of time can help boost a person’s credit score.
Paying off a credit card balance in full can have a negative impact on someone’s credit score.
The longer you use credit responsibly, the higher your credit score.
Low risk borrowers tend to have low credit scores.
Would you prefer a credit card with?
A higher interest rate
A lower interest rate
Which of the following is a benefit of having a high credit score?
Higher interest rates on loans.
More frequent late payment fees.
Lower interest rates on loans.
Increased annual fees on credit cards.
What is a common consequence of missing a credit card payment?
You may incur a late fee and a higher interest rate.
Your credit limit is automatically increased.
Your credit score improves.
You receive a reward from the credit card company.
