Credit Card Basics
What does a credit card allow you to do?
What is borrow money to pay for purchases?
What term describes the available amount that can be borrowed on your credit card?
What is your credit limit?
What happens if you don’t pay your credit card balance in full by the due date?
What is you will be charged interest?
What’s one factor that impacts your credit score?
What is your payment history, credit utilization, or the length of your credit history?
Taylor purchased a TV for $745. If she makes monthly payments of $45, how much will she pay after 10 months?
What is $450?
True or False: A credit card requires you to pay the full balance each month to avoid interest.
What is True?
What is the smallest payment you can make on your credit card balance each month?
What is the minimum payment?
If your credit card charges a 20% interest rate, and you leave a balance of $500, how much interest will you be charged annually?
What is $100 (20% of $500)?
True or False: A higher credit score will likely result in a lower interest rate on loans or credit cards.
What is True?
A credit card charges 15% APR. If your balance is $1,000, how much interest will you owe in one year?
What is $150?
What is one disadvantage of using a credit card?
What is high-interest rates or potential for debt?
What is it called when you transfer a balance from one credit card to another?
What is a balance transfer?
What type of fee might be charged if you miss a payment or go over your credit limit?
What is a late fee or over-limit fee?
Which of the three credit bureaus provides your credit score?
What are Equifax, Experian, and TransUnion?
If your balance is $2,500 and you make a minimum payment of $50 each month, how long will it take to pay off the balance? (Assume no additional charges and no interest).
What is 50 months? (2,500 ÷ 50)
What is a Schumer Box?
What is a standardized format that lists the terms and fees for a credit card?
What is the term for borrowing cash from an ATM or bank using your credit card?
What is a cash advance?
What is the term for the yearly cost of borrowing, including interest and fees, expressed as a percentage?
What is the Annual Percentage Rate (APR)?
What score range is considered excellent for a credit score?
What is 750 or higher?
A credit card has a $5,000 balance with a 20% interest rate. If you pay only the minimum payment of $100 a month, how much interest will you pay in one year?
What is $1,000 (20% of $5,000)?
What’s the main difference between a credit card and a debit card?
What is a credit card lets you borrow money, while a debit card uses your own funds from your checking account?
What is the maximum amount of time you have to pay your balance before interest is charged?
What is the grace period?
What’s the difference between an introductory APR and a regular APR?
What is an introductory APR is a lower rate offered for a limited time, and the regular APR is the higher rate charged after that period?
What is the term for a credit score below 580, which typically indicates a poor credit history?
What is a subprime credit score?
If you make a $100 payment on a credit card balance of $800 with an interest rate of 18%, how much will your balance be after the payment and interest is applied?
What is $718? (First, calculate interest: $800 × 18% = $144. Then, subtract the payment: $800 + $144 - $100 = $844, then subtract payment for new balance: $844 - $100 = $718.)