PF 9-3 Lesson

If you don’t pay at least the minimum amount on your monthly credit card bill, your credit card issuer will:

• increase their APR rate

• decrease their APR rate

• charge a late fee

• charge an annual fee.

The total cost of borrowing money for one year, expressed as a rate, is called:

• Annual Percentage Rate

• Periodic Interest Rate

• Average Daily Balance

• Cost of Credit

If during the month of September you make three purchases using your credit card, one for $800, one for $500 and one for $100, what amount will be shown as your balance on your October statement?

• $1,400

• the APR

• $800

• $100

A rate charged on a loan, or earned on an investment, over a specific period of time, is called:

• Periodic Interest Rate

• Cost of Credit

• Average Daily Balance

• Minimum Amount

If you receive your credit card bill for $800, and it offers a minimum payment of $100, if you pay the $100 minimum amount, what will happen?

• you will be charged a late fee

• a finance charge will be applied to the remaining $700

• your daily periodic rate will change

• your APR will decrease

A method to calculate interest charges based on the sum of the balances owed each day, divided by the number days in the billing period, is called:

• Periodic Interest Rate

• Daily Periodic Rate

• Average Daily Balance

• Minimum Amount

Visa and Mastercard are examples of credit card:

• issuers

• networks

• banks

• lenders

If your credit card issuer gives you 21 days to pay your prior month balance without charging a finance charge, this is called:

• a debit card

• a grace period

• loan forgiveness

• average daily balance