EVERFI

Finance charges and late fees

Making a late payment or transferring a balance to another card can result in extra fees.

Which of the following payment types require you to pay upfront?

Only money orders and pre-paid cards require upfront payment. Credit cards and merchant cards are forms of credit.

Which payment method protects you from the possible costs of spending more money than you have available?

Prepaid cards limit your spending to the amount that you have on your card. Unlike debit cards, you can never spend more money than you have, preventing overdraft fees. And unlike credit cards, you will never have to pay interest on purchases made with a prepaid card.

ll of the following are fees typically charged by credit card companies EXCEPT:

Reload fees

Credit

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Fees

Some cards charge you special fees such as an annual membership fee.

Rewards

Some cards offer rewards - like airline miles discounts or cash back - to get people to sign up or use a particular credit card.

Which of the following statements are TRUE about credit cards? I. When you use a credit card, the money comes directly out of your account. II. Credit cards typically offer more fraud protection than debit cards. III. Transactions made with a credit card can impact your credit score.

Statement 2 and 3

APR

The "Annual Percentage Rate" is the interest rate charged by your credit card on any balance not paid off before the next billing cycle.

When would you need to use the Rule of 72?

The Rule of 72 is an estimate used to find out how long it will take your money to double. All you need to know is your interest rate.

Credit limit

The amount of money you can charge to your credit card

The primary goal of the Federal Reserve system is to:

The primary goal of the Federal Reserve System is to maintain a safe and stable banking system.

Balance transfer

You might save money by transferring a balance to a card with a lower interest rate but you may have to pay a fee.

Which of the following statements about minimum payments is INCORRECT?

You will not be charged a late fee if you make the minimum payment on your credit card balance.

Which payment method would you use if you want purchases to come straight from your checking account so that you always know how much you have in the bank?

A debit card is linked directly to your bank account, so it's easy to monitor your bank account and always know exactly where your money is going at all times.

"Compounding frequency" refers to:

Compounding frequency is how often your interest is calculated and added back into your account. The more frequently this happens, the more interest you will earn.

Debit

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Which payment method offers you the most fraud protection when you're on vacation?

If you make a purchase away from home, the extra anti-fraud protection from a credit card can help you if someone steals your card number. Whether you're on vacation or not, always contact your credit card company if you notice fraudulent charges. Most likely you won't be responsible for paying that money back.