Exam 8: Managing Your Credit

Which of the following is not true regarding payroll cards?

Because of the short-term nature of credit card lending, the condition of the economy is not considered.

It is good financial planning to pay only the minimum credit card payment and thus maintain a balance since interest rates are low on credit cards.

A personal credit card statement does not contain which of the following?

Which of the following are good tips on the use of a credit card?

The ________ method charges interest based on the balance at the beginning of the new billing period.

Bill borrowed $3,600 and will be charged a simple interest rate of 18%. Bill will pay ________ interest for borrowing the money on April 1 and repaying the money on December 31.

Of the three methods by which finance charges may be calculated on outstanding credit card balances, the least favorable to the cardholder is the ________ balance method.

Credit Card companies have no requirement to disclose fees they will charge to prospective credit card holders.

Which of the following is not correct about cash advances?

One disadvantage of a proprietary credit card is that it limits your purchases to a single merchant.

Assuming you were charged simple interest on a loan of $4,900 which requires you to repay in one year $5,292, what rate of interest would you be charged? (Round interest rate to the nearest hundredth percent if necessary.)

Finance charges apply only to balances that were not paid in full before their due date in the current billing period.

Creditors are willing to extend credit when the economy is weak to stimulate purchases.

John is considering pursuing one of two credit cards. Credit card "A" has no annual fee and charges an interest rate of 12.5%. Credit card "B" has an annual fee of $45 but charges an interest rate of 9%. If John is likely to have an average credit card balance of $2,000, the lowest annual expenses John could have with one of these two cards would be

To properly manage your money, you should use a credit card only if you will have the cash to cover the payment when you receive your credit card statement.

MasterCard, Visa, and American Express credit cards all allow you to pay only a portion of your amount due and finance the remainder from month to month.

The interest charged on purchases and cash advances on credit cards is computed in the same way.

Describe how credit cards affect your personal budget, income statement, and balance sheet. Has credit allowed you to expand your purchases?

If a credit card has a provision allowing you to make purchases beyond the stated credit limit for a fee, it is referred to as