Mathematics for Data and Financial Literacy

Question 1/4

After the introductory period, all consumers who have this Platinum Card will...

Right Answer

Many credit cards offer variable APRs based on the cardholder's credit score and payment history. After the introductory period, the APR may adjust according to the consumer’s creditworthiness and market conditions. Those who make late payments may also be subject to a penalty APR, which is much higher. Understanding these terms can help consumers avoid costly interest rates.

Question 2/4

What is the consequence of John not paying the full balance on his credit card bill?

Right Answer

If a cardholder consistently carries a balance without paying in full, the credit card issuer may increase the APR as a penalty. Penalty APRs can be as high as 25% or more, making it much more expensive to carry a balance. Paying at least the minimum due on time can prevent this increase, but paying in full is the best way to avoid interest charges. Credit card companies do not lower APRs for non-payment; instead, they impose higher penalties.

Question 3/4

Tamara goes on a spring break trip with her school to visit historical sites in Italy. She purchases $500 of souvenirs while on the trip. What will be the balance in her account, assuming she had a zero balance prior to making these purchases and makes no other purchases?

Right Answer

If Tamara does not pay off her credit card balance before the due date, interest charges will be added to the $500 purchase. Credit cards accrue interest daily on unpaid balances, leading to a growing total amount due over time. If she pays off the full amount before the due date, she will not incur interest. Otherwise, her balance will increase beyond $500 due to accumulated interest.

Question 4/4

All of the following actions lead to the payment of a credit card fee EXCEPT...

Right Answer

Credit card fees apply to actions such as late payments, cash advances, and foreign transactions. However, paying the bill in full and on time avoids interest charges and penalties. This is the best practice for maintaining good credit and minimizing costs. Responsible credit card use helps build a positive credit history and financial stability.