Credit Cards
A plastic card that you can use to access a line of credit that has been established in advance
A credit card
A summary of a consumer’s credit history is called a
Credit Report
A mathematical number created to help evaluate the risk with lending a consumer money
Credit score
How can a cardholder avoid paying interest on a credit card?
Pay the balance in full every month
What is the most popular ice cream flavor?
Vanilla
Credit card issuers are required to disclose the terms of a credit card offer in an easy to read box called a ..
Schumer Box
Type of credit where a borrower repays a specified number of equal payments (car loans, mortgages, etc.)
Closed - end credit (installment)
What are the agencies that come up with your scores called and are responsible for reporting your credit?
Credit Bureaus/ Experian, Equifax and TransUnion
What is the penalty APR?
The interest rate charged on new transactions if the penalty terms in the credit card contract are triggered
What is an advantage to getting a credit card?
Good for emergencies when you need money, good for building a credit score or history, etc.
If someone no longer wants to use their credit card, what should they do with the card?
Leave it open and dont use it
Line of credit established in advance (credit cards), and will continually be provided to you as you pay it back
Open-end credit (revolving)
A low credit score will affect an individual financially when borrowing money because ...
(higher interest rates of loans, higher monthly payments, difficulty borrowing)
What is a balance transfer?
Transferring money from one debt to another
What is the Fair Credit Reporting Act?
Passed in 1970, its primary goal is to ensure the accuracy, fairness, and privacy of your credit history.
What is one thing you should do to build your credit?
Open a checking account, open a savings account and make deposits, hold a job for a specific amount of time
What you fill out to see if you qualify and get approved for a specific credit card
Credit applications, requests to view or give out credit report
What happens to your credit score / history if you applied for many credit cards within a short period of time?
Negative/ go down
If an individual agrees to be a co-signer, how is their credit report affected by the positive or negative use of that account?
Could both improve & harm a credit report because the co-signer’s credit report will reflect the use of the credit account
What is the minimum payment on a credit card statement?
The least amount of money you need to pay that month to keep your account in good standing.
If a credit card is stolen and used fraudulently, how much will you be liable for?
Nothing
When may a person view their credit report for free?
Once a year, from each of the three main credit reporting agencies
What information is included when calculating a credit score?
Payment history, outstanding debt, pursuit of new credit (not medical history, not salary)
What is the tallest dog breed in the world?
Great Dane
When reviewing a credit card statement, what is the past due amount?
The minimum payment due not paid by the due date