With a credit card, you pay later for something you buy. Which situation would result in a credit card issuer charging a late-payment fee?
A cardholder fails to make a minimum payment one month.
Which situation would result in a credit card issuer charging a balance transfer fee?
You can buy something now and pay for it later. Which situation would result in a credit card issuer charging a balance-transfer fee?
A cardholder pays off one credit card with a new credit card.
Which credit card feature determines the amount of interest paid on unpaid balances?
Credit Card APR
The APR on a credit card
dictates the interest that you will pay when carrying a balance from month to month. You will not incur interest if you pay your bill in full every month and thereby maintain your grace period.
What is one advantage of using a credit card to make purchases?
One advantage of using a credit card is that
you receive a list of your purchases
, which enables you to keep track of your spending.
Which statement about debit and credit cards is true?
Which of the following statements comparing debit cards to credit cards is TRUE?
Debit cards allow you to draw funds directly from your checking account
. Debit cards typically offer greater fraud protection than credit cards. Debit cards never require a signature to finalize a purchase like credit cards.
Can I keep transferring credit card balances?
You can
generally transfer balances from as many cards as you like
, as long as you stay within the new card's credit limit. This sounds like a no-brainer, but keep in mind that most balance transfer offers involve a fee for moving the balance from your old card.
In what order are credit card payments applied?
The Card Act requires issuers to apply this part of your payment to
the highest-interest balance first
. After that, the remainder generally must be applied to the other balances in descending order, based on the applicable annual percentage rate, according to the law.
Do I get charged APR If I pay on time?
What is APR? An APR is the interest rate you are charged for borrowing money. In the case of credit cards,
you don't get charged interest if you pay
off your balance on time and in full each billing cycle. Card issuers express this rate annually, but to find your monthly interest rate, simply divide by 12.
What is 24% APR on a credit card?
If you have a credit card with a 24% APR, that's the
rate you're charged over 12 months
, which comes out to 2% per month. Since months vary in length, credit cards break down APR even further into a daily periodic rate (DPR). It's the APR divided by 365, which would be 0.065% per day for a card with 24% APR.
What transaction type has the highest APR?
Cash-advance APR
The interest rate you incur if you take out a cash advance. This rate is often one of the highest APRs you can be charged. Cash advances incur interest immediately, with no grace period.
What are some disadvantages of a credit card?
- Getting trapped in debt. If you can't pay back what you borrow, your debts can pile up quickly. …
- Damaging your credit. Your credit score can go down as well as up. …
- Extra fees. …
- Limited use.
What are 4 advantages of using credit?
- Paying for purchases over time. Credit cards give you the ability to pay for a purchase using your card today and pay off your credit card balance on a future date. …
- Convenience. …
- Credit card rewards. …
- Fraud protection. …
- Free credit scores. …
- Price protection. …
- Purchase protection. …
- Return protection.
Which of the following is a disadvantage of using a credit card?
Disadvantages of using credit cards
High-interest rates if not paid in full by the due date
.
Annual fees for some credit cards
– can become expensive over the years. Fee charged for late payments. Negative effect on credit history and credit score in case of improper usage.
Which action can hurt your credit score?
The following common actions can hurt your credit score:
Missing payments
. Payment history is one of the most important aspects of your FICO
®
Score, and even one 30-day late payment or missed payment can have a negative impact. Using too much available credit.
What is not a benefit of having a good credit score?
What is NOT a benefit of having a good credit score?
You'll get accepted to better education institutions
. What should you use a loan to purchase? A house, tuition for higher education, a car.
What are the two most important factors in calculating your credit score?
- Payment history (35%)
- Amounts owed (30%)
- Length of credit history (15%)
- New credit (10%)
- Credit mix (10%)
