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Questions and Answers
A credit card agreement includes a table summarizing key terms such as APR and fees. What is this table commonly known as?
A credit card agreement includes a table summarizing key terms such as APR and fees. What is this table commonly known as?
- The Schumer Box (correct)
- The Finance Charge Statement
- The Credit Summary Sheet
- The APR Disclosure Form
What is the primary purpose of a secured credit card?
What is the primary purpose of a secured credit card?
- To avoid annual fees
- To provide rewards and cashback bonuses.
- To offer a lower APR than unsecured cards.
- To build or rebuild credit history. (correct)
What does the Truth in Lending Act primarily regulate?
What does the Truth in Lending Act primarily regulate?
- The reporting of credit data by credit bureaus.
- The process for resolving credit card disputes.
- The maximum interest rate that can be charged on credit cards.
- The disclosure of loan terms, fees, and costs to borrowers. (correct)
Which of the following best describes 'Universal Default'?
Which of the following best describes 'Universal Default'?
What is the grace period on a credit card?
What is the grace period on a credit card?
What is the key difference between a fixed APR and a variable interest rate?
What is the key difference between a fixed APR and a variable interest rate?
What is a 'charge-back' in the context of credit card transactions?
What is a 'charge-back' in the context of credit card transactions?
How do credit scores, like those ranging from 300-850, impact a consumer's financial opportunities?
How do credit scores, like those ranging from 300-850, impact a consumer's financial opportunities?
A cardholder has a credit card with a $5000 credit line. They have already charged $4800. Which of the following fees would they LEAST likely incur based on this situation?
A cardholder has a credit card with a $5000 credit line. They have already charged $4800. Which of the following fees would they LEAST likely incur based on this situation?
What do Equifax, Experian, and TransUnion have in common?
What do Equifax, Experian, and TransUnion have in common?
Flashcards
Annual Fee
Annual Fee
A yearly charge for using a credit card.
Annual Percentage Rate (APR)
Annual Percentage Rate (APR)
The cost of borrowing money on a credit card, expressed as a yearly interest rate.
Card Member Agreement
Card Member Agreement
A document that explains the terms, fees, and rules of a credit card account.
Charge-Back
Charge-Back
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Credit Line
Credit Line
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Credit Score
Credit Score
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Due Date
Due Date
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Finance Charge
Finance Charge
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Fixed APR
Fixed APR
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Grace Period
Grace Period
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Study Notes
Key Credit Terms
- Annual Fee: This is the yearly charge for using a credit card.
- Annual Percentage Rate (APR): The cost to borrow money on a credit card, shown as a yearly interest rate.
- Card Member Agreement: This document outlines the terms, fees, and rules for a credit card account.
- Charge-Back: A credit card company issues this refund when a cardholder disputes a transaction.
- Credit: The ability to borrow money or get goods/services with a promise to pay later.
- Credit Cards: These include plastic or digital cards allowing users to borrow money up to a certain limit for purchases.
- Credit Line: The maximum amount of money a cardholder can borrow on a credit card.
- Credit Score: A numerical rating, typically from 300-850, that measures a person's creditworthiness.
- Due Date: The deadline for a credit card payment to avoid late fees and penalties.
- Finance Charge: The cost of borrowing money, including interest and fees.
- Fixed APR: An interest rate on a credit card that remains constant over time.
- Grace Period: The time between a purchase and when interest starts accruing, assuming the balance isn't paid.
- Minimum Finance Charge: The lowest possible amount of interest charged when a finance charge applies.
- Minimum Payment: The smallest payment a cardholder must make each month to maintain good standing.
- Over-the-limit Fee: A fee charged for exceeding a credit card's limit.
- Schumer Box: A table in credit card agreements that clearly displays key terms such as APR and fees.
- Secured Credit Cards: These credit cards are backed by a cash deposit, which are used to build or rebuild credit.
- Terms and Conditions: The rules, fees, and policies related to a credit card account.
- Universal Default: A policy allowing a lender to raise interest rates if a borrower is late on any payment to any creditor.
- Unsecured Credit Cards: Credit cards issued based on creditworthiness that do not require a cash deposit.
- Variable Interest Rate: An interest rate that fluctuates based on market conditions or a financial index.
- Equifax: One of the three major credit reporting agencies in the U.S.
- Experian: A major credit reporting agency that tracks credit history.
- TransUnion: A major credit reporting agency that collects credit data.
- Truth in Lending Act: Federal legislation mandating that lenders disclose essential loan terms, fees, and costs to borrowers.
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