CREDIT TERMS
Annual Fee
Annual fees are yearly fees charged by credit card companies to use certain credit cards and access their benefits.
What happens if I accidentally lose my credit card?
Contact your card issuer to close your card account.
What will I do if I miss a monthly payment?
Contact your credit card issuer, check your credit report, and set up reminders!
What is the purpose of a FICO score?
To measure your creditworthiness for loans and credit cards.
What can negatively impact your credit score the most?
Missing a loan or credit card payment.
Grace Period
A grace period is the number of days before interest starts accruing on new purchases.
What if my credit card number is stolen?
Contact your credit card issuer to lock your card.
What happens if you only pay the minimum payment on your credit card balance each month?
You carry a balance and may owe more in interest.
Can FICO Scores Change?
Yes, they can change based on new information (e.g., a missed payment or a new credit card). It’s important to keep track of your credit to maintain or improve your score over time.
Why is it important to build credit?
Building credit is essential for securing loans, renting apartments, and getting lower interest rates. A good credit score improves financial opportunities and demonstrates reliability to lenders.
Interest
Interest is what a credit card issuer charges when you don't pay off your statement balance in full by the end of the billing cycle in which the purchases were made.
What are common credit card scams, and how can I avoid them?
Common credit card scams include phishing emails, card skimming, and fake fraud alerts that trick you into revealing personal information. Avoid them by verifying sources before sharing details, using secure payment methods, and monitoring your statements for suspicious activity.
What happens when you max out your credit card?
Your credit score may decrease
What is considered a good FICO score?
A good FICO score typically falls between 670 and 739, while scores above 740 are considered very good or excellent. Higher scores improve your chances of getting better loan terms and lower interest rates.
What is a good credit score?
A good credit score typically ranges from 670 to 739. Scores above 740 are considered very good or excellent, which generally results in better loan terms and lower interest rates.
Cash Advance
A cash advance is when you withdraw cash from your credit card's available credit limit.
Do I allow my parents or friends to use my credit card?
No, allowing others to use your credit card can be risky, as it may strain relationships, affect your credit, and leave you responsible for any charges, so it’s important to trust the person and set clear boundaries.
What are the legalities of not being able to pay the credit card bills?
You will receive a court summons, and failure to respond can result in a default judgment against you. If the court rules in favor of the creditor, they will issue a judgment that legally confirms the debt you owe.
What are the 3 credit bureaus?
Equifax, Experian, TransUnion.
How can you improve your credit score?
Paying your bills on time and keeping credit utilization low.
Foreign Transaction Fee
A foreign transaction fee on your credit card bill appears when you make a purchase that either passes through a foreign bank or is in a currency other than the U.S. dollar.
What is a CVV code?
Card Verification Value. It is a security feature for credit or debit card transactions. A 4 digit code that verifies your possession of the card.
What fees and penalties should I be aware of when using a credit card?
Credit card fees and penalties may include annual fees, late payment fees, balance transfer fees, foreign transaction fees, and cash advance fees. Penalties such as increased interest rates and damage to your credit score can occur if payments are missed or limits are exceeded.
Does paying off a credit card improve my FICO score immediately?
Paying off a credit card can improve your FICO score, but the impact may not be immediate. It depends on factors like your credit utilization rate and the timing of when your credit card issuer reports your balance to the credit bureaus.
How does having a high balance on multiple credit cards affect your credit score, even if you're making timely payments?
Having a high balance on multiple credit cards can negatively affect your credit score, even if you're making timely payments, because it increases your credit utilization ratio. Lenders typically view a high utilization ratio (over 30%) as a sign of financial strain, which can lower your score and make it harder to secure favorable credit terms.