Financial Math: Credit Cards

Front

What does the term APR stand for?

Back

APR stands for Annual Percentage Rate, which is the yearly interest rate you will be charged on your credit card balance.

Front

Who is required to provide the Schumer box?

Back

All credit card issuers are required to provide the Schumer box.

Front

What specific information is required to be displayed in the Schumer box?

Back

The Schumer box must display APR, annual fees, grace period, and other penalties and fees.

Front

What is the minimum payment on a credit card?

Back

The minimum payment is the smallest amount you can pay each month to keep your account in good standing.

Front

What is a grace period in credit card terms?

Back

A grace period is the time during which you can pay your balance in full without incurring interest.

Front

What is a credit card fee?

Back

A credit card fee is a charge that may be applied for various actions, such as late payments or cash advances.

Front

What is the consequence of paying your credit card bill late?

Back

Paying your credit card bill late can result in late fees and increased interest rates.

Front

What is a cash advance on a credit card?

Back

A cash advance is when you use your credit card to withdraw cash, often incurring fees and higher interest rates.

Front

What is the difference between a secured and unsecured credit card?

Back

A secured credit card requires a cash deposit as collateral, while an unsecured credit card does not.

Front

What is the purpose of a credit limit?

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A credit limit is the maximum amount you can borrow on your credit card.