Choose wisely. There is only one correct answer to each question.
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1.
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.
2.
Interest on credit card balances is calculated by a variety of methods. With which method does a credit card add up each days balance in the billing cycle and average all of them?
Average daily balance. This method averages each days balance.
3.
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.
4.
Your credit card may charge you a separate fee for making a payment over the telephone.
True. This is a payment processing fee.
5.
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.
6.
When you are reporting a lost credit card, the bank or other issuer must be notified in writing.
True. The law now provides specific guidelines for providing written notice. Failure to adhere to these requirements will result in increased liability for any unauthorized use of your lost or stolen card.
7.
Which type of credit card requires you to pay back your full balance every month?
Charge card. The other types of cards noted are not necessarily charge cards.