Understanding Credit Cards

What is a credit card primarily used for?

• To purchase goods and services on credit

• To transfer money internationally

• To earn interest on savings

• To store cash securely

What is a crucial factor in determining your credit limit?

• Your age

• Your credit history and income

• Your spending habits

• The number of credit cards you own

What happens when you use a credit card to make a purchase?

• The store pays the credit card company

• The bank transfers money to your account

• The credit card company pays on your behalf

• You pay the store directly

What is one advantage of using credit cards?

• They always have low interest rates

• They automatically increase your savings

• They eliminate the need for a bank account

• They provide quick access to money

What is a potential drawback of using credit cards?

• They offer cash back rewards

• They are accepted everywhere

• They can lead to high debt if not managed properly

• They improve your credit score