Credit Card Management Concepts

The video tutorial explains how credit card statements work, focusing on the importance of the opening balance and the 55-day interest-free period. It covers how to calculate payment deadlines, the significance of minimum payments, and the charges associated with them. The tutorial also discusses managing monthly statements, payment strategies, and the consequences of late payments, emphasizing the importance of understanding due dates and interest calculations.

What is the significance of the opening date in a credit card statement?

• It marks the start of the billing cycle.

• It is the date when the cardholder's credit score is evaluated.

• It is the date when the card was issued.

• It determines the interest rate.

How many days do you have to pay off a purchase made on March 8th if the interest-free period starts on March 1st?

• 55 days

• 48 days

• 39 days

• 7 days

What happens if you do not pay off your credit card balance by the end of the month?

• You are required to pay a minimum amount or face interest charges.

• You get an additional 30 days to pay.

• You are charged a late fee.

• Your credit card is canceled.

What is the minimum payment required if the closing balance is $1,747 and the minimum payment is the greater of $10 or 3% of the balance?

• $1,747

• $10

• $52.41

• $52.41 or 3% of the balance, whichever is higher

What is the consequence of only paying the minimum amount due on a credit card?

• The interest rate is reduced.

• The credit card is upgraded.

• Interest is charged on the remaining balance.

• The remaining balance is waived.

Why might someone choose to pay their credit card balance at the last possible moment?

• To reduce their credit card limit.

• To maximize the interest earned on their bank account.

• To avoid paying interest.

• To increase their credit score.

What is the benefit of holding onto your money until the last day of the interest-free period?

• To get a discount on future purchases.

• To increase your credit limit.

• To earn interest on the money in your bank account.

• To avoid paying any fees.

How are credit card statements typically organized?

• By purchase category.

• By the date of purchase.

• By monthly billing cycles.

• By the amount spent.

Why is it important for banks to divide credit card statements into monthly cycles?

• To reduce the number of transactions.

• To make it easier for customers to manage payments.

• To increase the interest rate.

• To confuse the cardholders.

If a purchase is made on April 11th, when is the due date if the interest-free period is 55 days?

• May 25th

• June 5th

• April 30th

• May 11th