Credit Card Basics
This is the maximum amount you are allowed to borrow on a credit card (not a number)
What is a credit limit?
The Act requires companies to give this many days’ notice before raising interest rates.
45 days
People under 21 must show this or have a co-signer to get a credit card.
What is proof of income (ability to repay)?
Statements must clearly show how long it will take to pay off debt if you only pay this amount.
minimum payment?
The Act was passed to stop these kinds of unfair or deceptive credit practices.
abusive lending practices
This is the cost of borrowing money, usually shown as a yearly percentage.
What is APR (Annual Percentage Rate)?
Card companies must send your bill this many days before the payment is due.
21 days
The Act restricted companies from doing this on college campuses to pressure students.
What is aggressive marketing or giveaways for signing up?
The Act requires clear disclosure of this total, including interest, over time.
total cost of the debt?
By making terms clearer, the law helps consumers make this type of financial choice.
informed decision
Paying at least this amount each month helps you avoid late fees but still allows interest to build.
What is the minimum payment?
This type of surprise interest rate increase on existing balances was largely banned.
retroactive rate increases
A parent or guardian often must serve in this role for young applicants.
What is a co-signer?
Due dates must be on the same day each month to prevent this kind of confusion.
inconsistent billing?
Limiting sudden rate hikes helps people better manage this personal financial plan.
What is a budget?
This happens when you spend more than your credit limit, something the Act restricts unless you agree to it.
What is an over-the-limit charge?
The Act requires payments above the minimum to go toward this balance first.
What is the highest-interest balance
This rule helps prevent students from getting into debt they cannot realistically repay.
ability-to-pay requirement
If a payment is due on a weekend or holiday, issuers must accept it without this penalty.
late fee
The Act encourages responsible borrowing to help consumers build this over time.
What is good credit history?
This three-digit number shows lenders how trustworthy you are with credit.
What is a credit score?
These confusing last-minute charges, once common, were limited by requiring consistent due dates and times.
unfair late fees
Because of these protections, young consumers are encouraged to build credit more responsibly over this period.
early adulthood
These easy-to-read summaries help consumers understand rates, fees, and terms before signing up.
disclosure tables (Schumer boxes)
Overall, the law promotes fairness, transparency, and this key financial habit.
What is responsible credit use?