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Understanding Credit Cards: Common Myths and Key Terms Explained

This article explores essential credit card facts, including the average number of cards per family, credit card debt statistics, and the realities of paying off balances. Learn about important terms such as finance charges, annual fees, and annual percentage rates (APR). Discover how many people pay their credit cards in full and what credit card companies refer to responsible payers. Whether you're new to credit cards or looking to improve your financial literacy, this guide will provide clarity on common queries and financial terminology.

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Understanding Credit Cards: Common Myths and Key Terms Explained

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  1. Credit Cards

  2. Question 1 • How many credit cards does the average family have: • A. 3 • B. 6 • C. 8 • D.10 • Answer: 8

  3. Question 2 • 144 million people have credit cards. How many do you think pay them off in full: • A. 100 million • B. 110 million • C. 80 million • D. 55 million • D. 55

  4. Question 3 • Credit card companies name for a person who pays off all of their bill: • A. Positive Person • B. Mr. Carlson • C. Deadbeat • D. Revolver • C. Deadbeat

  5. Questions 4 • Average credit card debt for an American? • A. 2000 • B. 4000 • C. 1000 • D. 8,000 • D. 8000

  6. Question 5 • How many days does a card company have to give before changing terms of service • A. 90 days • B. 50 days • C. 15 days • D. 1 day • C 15 days

  7. Credit Card Terms • Annual FeeA flat, yearly charge similar to a membership fee, usually $25 to $50. • Finance ChargeThe dollar amount you pay to use credit, includes interest costs and all charges associated with the transaction. • Annual Percentage RateThe APR is the measure of the cost of credit expressed as a yearly rate. • Basically the Average of your interest rate • Fixed Rate-Stays the same • Variable Rate-Changes after a few months

  8. Credit Card Terms • Grace Period The grace period is the number of days you have before a credit card company starts charging interest on new purchases. Not all credit cards have a grace period. • Transaction FeesA fee for a cash advance, a late payment, or going over your credit limit. Sometimes there is a monthly fee if you did not use the card.

  9. 1. What is a yearly charge you get from a credit card? • 2. What is an introductory rate? • 3. What is the difference between a fixed rate and variable rate for a credit card? • 4. What is an APR? • 5. How do people get their APR reduced? 2 things

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