Credit card basics
What is a credit card?
This is the plastic or digital tool that lets you borrow money to make purchases.
What is Annual Percentage Rate?
APR stands for this phrase.
What is credit card debt?
This is what it’s called when you owe money on your credit card.
What is a credit score?
This three-digit number represents your creditworthiness.
What is paying the balance in full?
This habit helps avoid interest charges.
What is a credit limit?
This is the maximum amount of money you are allowed to borrow on a credit card.
What is interest?
This is the extra money you pay for borrowing when you don’t pay your balance in full.
What is debt accumulation?
Using credit cards for things you can’t afford can lead to this problem.
What is 670–850?
This range is considered a good or excellent credit score.
What is 30%?
Using less than this percentage of your available credit is recommended.
What is a late fee?
This fee is charged when you don’t pay at least the minimum payment by the due date.
What is True?
True or False: Paying only the minimum means you pay more interest over time.
What is the snowball method?
This strategy involves paying off the smallest balance first.
What is increase (or improve)?
Making payments on time helps your credit score do this.
What is a credit report?
Checking this regularly helps catch fraud and errors.
What is the minimum payment?
This is the amount you must pay each month to keep your account in good standing.
What is a variable APR?
This type of APR can change over time.
What is the avalanche method?
This strategy focuses on paying off the highest interest rate first.
What is decrease (or drop)?
Missing payments or maxing out cards causes your credit score to do this.
What are credit applications (or hard inquiries)?
Having too many of these at once can hurt your credit score.
What is going over the credit limit (or over-limit)?
This happens when you use more than your credit limit.
What is the due date (or grace period end)?
Paying your full balance by this date helps you avoid interest charges.
What is borrowing money / getting approved for loans?
High credit card debt can make it harder to do this in the future.
What is payment history?
This is the most important factor affecting your credit score.
What is responsible spending?
This type of spending means using credit only for needs, not wants.