Credit Cards – The Basics

Front

What is a credit card?

Back

An agreement with a bank to borrow money for purchases and pay back later

Front

What do credit card holders agree to pay for the convenience of using the bank’s money?

Back

High interest rates

Front

Fill in the blank: The money that people owe from using credit cards is called _______.

Back

debt

Front

True or False: Stores that accept credit cards do not have to pay any fees to credit card companies.

Back

False

Front

One way to avoid paying credit card interest is to:

Back

Pay your balance in full each month

Front

What is an incentive that banks might offer to encourage people to use their credit cards?

Back

Free merchandise, Store credits, Cash back.

Front

The bank benefits from earning _______ on the borrowed money.

Back

interest

Front

Stores benefit from allowing credit cards to be used because:

Back

they can increase sales by offering more payment options

Front

Why would a bank offer a credit card which allows users to use the bank’s money?

Back

Credit card banks make a lot of money off credit card interest and fees.

Front

People that use credit cards but don’t pay them off right away increase what?

Back

debt