Test your knowledge of Cards & Credit basics with these 30 questions
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1. On a variable rate Credit Card, the interest rate is calculated by
With variable-rate cards, your APR (annual percentage rate) can change. Most credit cards have variable rates, and most of them are pegged to a prime interest rate. The prime rate, in turn, moves in lock step with a Reserve Bank rate.
2. Which of the following are NOT taken into account when calculating your Credit score?
A, B & C are just three of the many factors taken into account when calculating an individuals credit score
3. A credit scoring model is (choose the best answer that applies)
4. Who assumes primary liability for the consumer’s debt incurred by use of the card?
5. Failure to pay a Credit Card on time can cause which of the following to happen? (Check all that Apply)
Its always best to pay your credit card bill or instalment on time
6. Using the simple interest method calculation, interest is
7. Credit blocking occurs when
8. What do we mean by the term Zombie debt?
Zombie debt is old credit card and other debts that are beyond the statute of limitations, so a debt collector cannot successfully use the courts to collect them. Although these debts no longer have the courts as an avenue of collection, there’s nothing to prevent debt collectors from asking consumers to pay them. In recent years, the debt collection industry has expanded, creating more agencies and lengthier efforts to collect. So from the consumer’s perspective, debts don’t die, they rise to live on and on. Like zombies.
9. What advice should you give a customer when asked how much they should pay on their Credit Card?
10. Given a lost or stolen card, potential losses with a Debit card are usually
11. Which method for calculating interest on an outstanding balance usually produces the lowest overall interest payment for a stated contract rate?
The Simple Interest method can most often be calculated by using the following formula: SI = P × R × T, where P = Principal, R = Rate of Interest, and T = Time period
12. What is a secured Credit Card?
13. When referring to Credit Card Interest, what do the letters APR stand for?
14. How is interest calculated on a credit card?
15. An Affinity card (Check all that Apply)
An affinity card is a credit card offered in conjunction with two organisations, one a card issuer and the other a non-financial group with which consumers have an affinity. Universities, sports franchises and nonprofit organisations are examples of affinity groups that often offer special discounts or deals for using their credit cards issued in partnership with a major bank.
16. ONE significant drawback associated with using a Credit Card is
It can be easy to run up credit card debt at sometimes significantly higher interest rates than ordinary borrowing from a bank
17. Adding someone to Your Credit Card account as an authorized user in an effort to raise their Credit score is …
18. Which impact is the most likely outcome when cancelling a credit card?
19. Which of the following statements about an individuals credit record, is/are False
If you take adverse action against a consumer based on information in a consumer report, you must tell the consumer. The most common type of adverse action is a denial of credit. Adverse action is defined in the Equal Credit Opportunity Act and the FCRA to include:
Denying a consumer’s request for additional credit under an existing account generally isn’t considered an adverse action but changing the terms of the existing account can be.
20. How many digits are embossed on the front of a standard Visa and Mastercard Credit/Debit Card?
Visa and Mastercard cards contain 16 digits. American Express has 15 and Diner’s Club has 14. The numbers on a credit card actually follow a universal standard which is used to identify specific functions. Credit cards that are part of the Visa, Mastercard and Discover payment networks have 16 digits, while those that are part of the American Express payment network have just 15. There are also other numbers on the front or back of your credit card that can be used to authenticate transactions, but do not form part of the main card number
21. What is the best way to improve Your Credit score?
22. You can increase Your Credit score if you
It’s possible to improve your credit scores by following a few simple steps, including: opening accounts that report to the credit bureaus, maintaining low balances and paying your bills on time
23. Can a Credit Card issuer change your interest rate at any time for any reason?
24. True or false: If a Credit Card bill is paid in full, on time, every month, no interest will apply
True, you will not incur interest charges if balances are settled in full before the due date
25. When a Credit line is reduced by an anticipated purchase this is known as
26. A poor Credit score could affect
27. What role do Card Schemes (like Visa or MasterCard) play in Credit Card purchases?
28. What term best describes a Credit Card? Choose the answer that best fits
29. A revolving Credit account is…
Revolving credit is an agreement that permits an account holder to borrow money repeatedly up to a set dollar limit while repaying a portion of the current balance due in regular payments. Each payment, minus the interest and fees charged, replenishes the amount available to the account holder. https://www.investopedia.com/terms/r/revolvingcredit.asp
30. You can stretch out the repayments on a student loan, if you arrange
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