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1.
What happens to the promotional APR on a credit card if you make a late payment while it is in force?
The promotion may end or continue. The company has the right to end the promotion and raise your rate, but whether it does so will be spelled out in the card agreement.
2.
When considering the potential drawbacks of credit card use, one of the biggest concerns is that you are liable for unlimited amounts of charges incurred when a card is lost or stolen.
False. Federal laws and bank policies limit your liability for unauthorized charges, as long as you notify the card issuer in a timely fashion if your card is lost or stolen.
3.
When a credit card company calculates interest charges on the current balance by factoring in the average daily balance from the previous billing cycle, thats called ________.
Double-cycle billing. Double-cycle billing is no longer allowed.
4.
Why might a merchant offer you a discount if you buy its product with cash instead of credit?
If you pay cash, the merchant wont need to pay a commission on it. But using a credit card results in a commission to the merchant, which is passed on to you through higher prices.
5.
A credit card issuer is allowed to increase the APR on a new card within the first year _______.
Only in certain circumstances. Certain circumstances, such as if the card agreement discloses up front that it is going to, are allowed.
6.
A credit card that requires you to deposit money as collateral is called _______.
A secured card. The money you deposit acts as its security in the event that you default on it.
7.
What is the name for the credit card fee that is charged to you when you take money out of your card?
Cash advance fee. This fee is charged for cash advances made on your card.