Understanding Credit Card Statements

What is the typical duration of a billing cycle?

• 45 to 50 days

• 35 to 40 days

• 28 to 31 days

• 15 to 20 days

How is the statement balance different from the current balance?

• Statement balance includes future transactions

• Current balance is a snapshot of the billing cycle

• Statement balance is a snapshot of the billing cycle

• Current balance is always lower than the statement balance

What is the grace period in credit card billing?

• The time between the billing cycle and the next billing cycle

• The time between the statement opening and closing dates

• The time between the payment due date and the next statement opening date

• The time between the statement closing date and the payment due date

Why is it important to pay the full statement balance by the due date?

• To increase the credit limit

• To avoid interest charges

• To change the statement closing date

• To reduce the billing cycle duration

What happens if you only make the minimum payment on your credit card?

• You avoid all interest charges

• Your credit limit increases

• Your credit score improves

• The remaining balance accrues interest

What is the impact of missing a credit card payment?

• It reduces your interest rate

• It increases your credit limit

• It can lead to a late fee and a drop in credit score

• It has no impact on your credit score

What does APR stand for?

• Annual Penalty Rate

• Annual Premium Rate

• Annual Percentage Rate

• Annual Payment Rate

How is credit utilization calculated?

• Credit limit divided by current balance

• Current balance divided by credit limit

• Statement balance divided by credit limit

• Credit limit divided by statement balance

What is a good credit utilization percentage to aim for?

• Below 50%

• Below 30%

• Below 20%

• Below 10%

Why is APR irrelevant if you pay your credit card bill in full each month?

• Because the APR is always zero

• Because the APR only applies to debit cards

• Because the APR is included in the statement balance

• Because no interest is charged