WorksheetsHow Credit Cards Work - 25 Question Multiple Choice Test
Total questions: 26
Worksheet time: 18mins
What is the average number of credit cards held by Americans?
One
Two
Four
Six
What is one major disadvantage of carrying a credit card balance?
You earn more rewards
No interest is charged
You lose access to cash
You pay finance charges
What company introduced the first universal credit card?
American Express
Diners Club
Visa
Discover
When did BankAmericard change its name to Visa?
1966
1959
1976
1989
What is the purpose of the last digit in a credit card number?
Expiration checker
Card type indicator
What is a magstripe?
A. A signature strip
B. A magnetic stripe storing data
C. A barcode reader
D. A smart chip
Which of the following can erase a magstripe?
A credit score check
Exposure to magnets
Freezing temperatures
Chip damage
What type of card uses encrypted transactions and may support contactless payment?
Store card
Magstripe card
Smart card
Cash card
What technology allows contactless cards to transmit data to a terminal?
NFC
RFID
UV
TCP
What law limits your liability to $50 in case of credit card fraud?
Which practice helps protect your card information online?
Using public Wi-Fi
Clicking email links
Going directly to merchant websites
Skipping receipts
What is a grace period?
Time between applications
Time you can use the card
Time to pay off a bill without charges
Extra time for balance transfers
What is a secured credit card?
Card used online only
Card with insurance benefits
Card backed by a deposit
Card with zero interest
What type of card is tied to a specific store?
Bank card
T&E card
House card
Affinity card
What is the benefit of affinity cards?
What should you compare when choosing a credit card plan?
Number of card colors
Annual fee and interest rate
TV commercials
Card size
What does a fixed-rate card offer?
Changing interest rate
Easier approval
Unchanging APR
No credit check
Which method of calculating finance charges is most common?
Average daily balance
Previous balance
Random selection
Reverse compound
What happens if you make only the minimum payment on a high-interest card?
You avoid interest
You pay more over time
Your credit score improves
Your balance increases
20. (11:00) What law helps consumers dispute billing errors?
Fair Credit Billing Act
Consumer Credit Protection Act
Truth in Lending Act
Electronic Fund Transfer Act
What does the Fair Credit Billing Act do?
Credit Safety Act
Fair Credit Billing Act
Financial Freedom Law
Billing Fairness Act
How long do credit card companies have to respond to a billing error dispute?
7 days
15 days
30 days
60 days
What is a red flag to lenders during credit checks?
No open accounts
Too many inquiries
Owning a house
Low income
Why can unused credit cards hurt your credit?
They expire faster
They lower your credit limit
They show potential risk for overspending
They are not accepted widely
What's a good strategy for paying off credit card debt?
Making minimum payments
Taking cash advances
Paying more than the minimum
Ignoring interest
What is the benefit of choosing option C?
More cashback
Better credit limit
Lower total interest paid
Easier card activation
