Credit Card Unit Test

What is credit?

• Money allocated to a specific account for future use by the customer without borrowing

• Money received in exchange for a promise to pay a specific amount of money at a later

  date

• An customer’s ability to repay a loan

• The ability of a customer to pay back a loan as perceived by the credit card company

When you buy something with a credit card, which one of the following will usually

save you money over the long run?

• Paying the entire amount owed each month

• Paying a small portion of the amount owed over a longer period of time

• Paying a small portion of the amount owed each month

• Paying the entire amount owed, but only every other month

Answer explanation

If you pay your bill in full you won't be charged interest.

What does it mean to buy something 'on credit'?

• To promise to pay for an item later

• To promise to fill out a credit card application in the future

• To promise to pay for an item at the point of sale

• To promise that you’ll purchase an item at a later date

Benefits of credit cards include:

• They are safe and convenient

• Credit cards typically offer bonuses and rewards

• They allow you to purchase items online

• All of these

Which of the following items can be found on a credit card statement?

• The payments made and new charges

• All fees and interest charged

• Year to date totals and how long it will take you to pay it off with only the minimum

  payment

• All of the above

What is the amount charged if your payment is received after the billing date?

• Late payment fee

• Overdue fee

• Withdrawal fee

• Reward fee

Which one is NOT a benefit of having a credit card?

• It can raise a person’s standard of living

• It is convenient

• A customer is charged interest

• It increases the financial options available to a customer

What does APR stand for?

• Accident Protection Rate

• Animal Parade Rate

• Annual Percentage Rate

• Actual Points Reward

Answer explanation

It's your interest rate. Divide by 12 to get your monthly rate.

It is better to compare credit card offers before choosing one:

• True

• False

Answer explanation

Duh.....

Interest Rates on credit cards are the same for everyone.

• True

• False

Answer explanation

Interest Rates are HIGHER for people with BAD CREDIT SCORES!