Everfi Module 3 Payments

Paying more than the minimum payment can

help you get out of debt faster

If you’re already in debt, try to avoid

missing a credit card payment, as it can lead to additional late fees and even raise your APR

The average minimum payment only equals 2 to 3% of your total debt, so making only the minimum payments on your credit card bill may

keep you in debt for a long time pay more than the minimum

When choosing a credit card, look for

annual fees, changes to your APR, and other finance charges

Credit card rewards programs can be appealing, but

be sure you understand how they work beforehand

If you charge something to your credit card and don’t pay off the full balance before the next billing cycle, you’ll be

charged interest

Credit cards typically charge high

APRs

You can avoid paying high interest rates by paying off your credit card in

full each billing cycle

Credit cards allow you to build your credit history and may protect you against fraudulent charges, but also come with

high interest rates on any outstanding balance

Debit cards can help you stick to a budget, but

beware of spending more money than you have in your account. This can lead to overdraft fees and interest payments

Unlike credit cards, debit cards will not

build your credit or provide as much protection from fraudulent charges

With certain paper payment methods – like cash, cashier’s checks, and money orders – you are providing

the money for a purchase upfront

With debit cards and checks, however, the money for a purchase comes

directly out of your checking account

When you use a credit card to make a purchase, you’re getting a loan

from a credit card company

With debit cards (sometimes called check cards), the money is

debited directly from your checking account

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

Money order, Cashier’s check, Pre-paid card

Which of the following is true?

Checks and Debit Cards both withdraw money directly from a bank account

Which of the following statements comparing debit cards to credit cards is TRUE?

Debit cards allow you to draw funds directly from your checking account.

Which of the following is NOT true of credit cards?

They are the best payment type to use when trying to stick to a budget.

Which payment method typically charges the highest interest rates?

Payday loans

Which of the following tells you how much your credit card interest will be if you only pay the minimum balance each month?

Annual Percentage Rate

Which payment type can help you stick to a budget?

Debit cards

Which of the follow will happen if you miss a monthly credit card payment?

You will be charged a late fee

If you are planning to carry a large balance on your credit card, which of the following credit card features should you look for?

Low APR

What is a credit limit?

The maximum amount you can charge each billing cycle.

The annual percentage rate on a credit card determines _______.

the amount of interest you are charged on credit card purchases

What is the amount of money you still owe to their credit card company called?

Credit Card Balance

Making a credit card minimum payment:

Means you are paying a small portion of your total credit card debt

Which of the following is true of both paying with a check and paying with a debit card?

When used, both take money directly out of a bank account.

Which of the following can increase your credit cards APR?

Missing a credit card payment

The amount of money you can charge to a credit card is called:

Credit limit

hat is a credit card balance?

The amount of money you still owe to the credit card company

Which of the following are true if you pay only the minimum amount each month towards your credit card bill?

You will be charged interest on your remaining balance. Your Annual Percentage Rate will increase.

Which of the following is NOT a common credit card fee?

Minimum payment fee

Which payment type is best if you are trying to stick to a budget?

Debit Card