Podcast
Questions and Answers
What is a key feature of credit extended to consumers prior to a purchase?
What is a key feature of credit extended to consumers prior to a purchase?
What determines the line of credit for bank credit cards?
What determines the line of credit for bank credit cards?
What is a benefit of using reward cards?
What is a benefit of using reward cards?
What is a type of credit card that requires collateral?
What is a type of credit card that requires collateral?
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What is a common fee associated with credit cards?
What is a common fee associated with credit cards?
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What is the purpose of a monthly credit statement?
What is the purpose of a monthly credit statement?
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What is a way to avoid interest on a credit card?
What is a way to avoid interest on a credit card?
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What type of credit card is designed for students?
What type of credit card is designed for students?
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What is a characteristic of high-interest credit cards?
What is a characteristic of high-interest credit cards?
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What is a type of credit card that partners with a specific organization or group?
What is a type of credit card that partners with a specific organization or group?
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Study Notes
Managing Credit Cards
- Review statements monthly to verify entries and pay by due date to avoid finance charges.
- Pay minimum monthly payment or entire amount to avoid finance charges.
Choosing the Right Credit Card
- Consider annual fees, rate of interest charged on balance, length of grace period, and method of calculating balances.
- Compare introductory rates, regular APR, cash advance fees, and late fees among different issuers.
Credit Card Types
- Retail charge cards: second largest category, offered by department stores and oil companies, with preset credit limits.
- Debit cards: work like a check, accessing checking account, with no line of credit and greater liability exposure if fraudulently used.
- Prepaid cards: a type of debit card with a fixed amount, not accessing checking account.
- Revolving credit lines: offered by banks or other financial institutions, with higher credit lines and lower interest rates than credit cards.
Credit Cards and Open Account Credit
- Credit extended to consumer prior to a purchase, with a specified credit limit.
- Offered by retailers and financial institutions, with monthly credit statements and the option to pay balance in full to avoid interest.
Bank Credit Cards
- Line of credit depends on applicant’s financial status and ability to pay.
- Features cash advances, balance transfers, and interest rates and fees.
Fees and Charges
- High interest rates, annual fees, transaction fees, late-payment fees, over-the-limit fees, balance transfer fees, and foreign transaction fees.
Special Types of Bank Credit Cards
- Reward cards: offer frequent flyer programs, auto rebate programs, and other merchandise rebates.
- Affinity cards, secured (collateralized) credit cards, and student credit cards.
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Description
Learn how to manage your credit cards effectively by reviewing statements, paying on time, and avoiding finance charges. Also, discover the importance of shopping around for the best deal.
