Credit Cards

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What is a credit score?

Back

A numerical representation of a person's creditworthiness, based on their credit history.

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How does a high credit score affect interest rates?

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A high credit score typically allows lenders to offer lower interest rates.

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What is a credit limit?

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The maximum amount of credit that a financial institution extends to a client.

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Why do credit providers set credit limits?

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To prevent consumers from spending more money than they can pay back.

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What is an annual fee in relation to credit cards?

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A fee charged by a card issuer for being a cardholder, usually billed once a year.

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What is the minimum payment on a credit card?

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The smallest amount you can pay on your credit card bill to keep your account in good standing.

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What is the consequence of only paying the minimum payment?

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It can lead to accumulating interest and prolonging debt repayment.

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What does it mean to pay your credit card balance in full?

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Paying the total amount charged on your credit card each month, avoiding interest charges.

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What is interest in the context of credit cards?

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The cost of borrowing money, expressed as a percentage of the outstanding balance.

Front

What is a late payment fee?

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A charge incurred when a credit card payment is not made by the due date.