Which of the following is true about credit cards? A) when you use one, the money is taken directly from your bank account B) they usually charge a lower interest rate than debit cards C) they are issued by networks such as visa D) you can run up huge debt if you don’t pay the balance off quickly
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A) False. When you use a credit card, the money is not taken directly from your bank account. Instead, the credit card issuer lends you the money to make the purchase, and you are required to pay back the money later, usually with interest.
B) False. Credit cards typically charge higher interest rates than debit cards. The interest rate charged on a credit card varies depending on the issuer, the type of card, and the cardholder's creditworthiness, but it is generally higher than the interest rate charged on a typical debit card. This is because credit cards are a form of unsecured debt, while debit cards are tied directly to the funds in your bank account.
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- Suppose a bank offered to make loans to potential borrowers withoutchecking their credit history. What would be true of the types ofborrowers they would attract compered with banks that did checkcredit history. Would such a bank charge the same interest rateon loans as banks that check credit history? Explain those with areason in 4 lines.What is the difference between a credit card and a debit card? O A credit card is loaned money, plus interest, whereas a debit card is linked to your bank account that contains your money. A credit card is your money that is not loaned. O A debit card is loaned money. O None of the above.Revolving lines of credit generally do not involve the use of credit cards and often offer borrowers more credit at lower interest rates than credit cards. Borrowers use checks to pay their bills, purchase goods and services, or even to take cash advances. Banks, brokerage houses, and other financial institutions offer open account credit to qualified borrowers. Revolving Credit Lines Overdraft protection is linked to your established overdraft provision can signal that you're You receive funds from an unsecured personal line of credit credit be in case you overdraw your account. It draws on a line of credit that is usually . You should use your overdraft provision . Frequent use of your going through the formality of setting up a new loan. It draws on a line of credit that can . Remember, even though acquiring the funds is as simple as writing a check, the funds still represent a loan. Payments are usually structured to be due Home equity lines of credit enable you to acquire cash…
- Describe two advantages of using credit cards. ..... Choose the correct answer below. O A. Relatively low interest rates on unpaid balances and convenience of use. B. You get to use a product before actually paying for it and it provides a source of temporary emergency funds. C. May provide amenities and difficulty to overspend. D. Lack of caps on interest rates and fees.Bank rates on credit card balances are usually similar to the rate charged on business loans. Group of answer choices: True Falseis a short term loan against your credit card. Instead of using the credit card to make purchases or pay for a service, you bring it to the bank or ATM and receive cash to be used for whatever purpose you need.
- All credit cards are not alike, nor are all spenders alike. When you are deciding which credit card to obtain, your first step should be to honestly determine what kind of spender you are and how you pay your bills. Then consider cards whose features best match your purchasing and payment habits. These cards will work to your greatest advantage. Consider the following example: Shop Around for the Best Deal Larry is shopping around for a credit card and does not expect to pay the balance in full each month. Larry isn't a big spender and will carry small balances from month to month. What is Larry's best option? O Pay an annual fee to keep the interest rate as low as possible Select the card with the longest grace period regardless of its annual fee or interest rate Avoid cards with annual fees, and get one with as low an interest rate as possibleWhy it can be dangerous to provide credit card information over the internet? Does it stop the risk if you only use credit card at local business?Which of the following is not a reason for the Jones Hardware Store to accept credit cards from customers? Group of answer choices A)Jones can receive its money faster than if it directly extended credit to the customer by an account receivable. b)The credit card company offers a discount to Jones so that Jones will have more money available for operations. C)Jones will not have to be concerned with nonsufficient funds checks from customers. d)Jones will not have to have extra office workers to make phone calls to customers requesting collections on accounts. E)All these are reasons to accept credit cards.
- Which of the following actions is least likely to increase acompany’s accounts receivable turnover?a. Encouraging customers to use bank credit cards, suchas Visa and MasterCard, rather than other nationalcredit cards, such as American Express.b. Offer customers larger cash discounts for making earlypayments.c. Reduce the interest rate charged to credit customers.d. Sell accounts receivable to a factor.K Checking Accounts. Why do individuals use checking accounts? What is the disadvantage of having funds in a checking account? Explain overdraft protection and stop payment orders. Are all bank fee structures the same? Checking accounts: (Select the best answer below.) OA. no longer offer a record of payment, but they often pay interest. B. are used by people with insufficient funds in savings accounts. C. have varying fees and often pay substantial interest. OD. enable people to have a record of payment, but they often pay no interest. Overdraft protection is: (Select the best answer below.) O A. a loan, usually at high interest rates, that a bank gives certain customers when they don't have sufficient funds in their accounts to cover checks they have written. OB. required by law. O C. a service, usually at no charge, that a bank gives certain customers when they don't have sufficient funds in their accounts to cover checks they have written. D. a loan, usually at no charge, that a…Why it can be risky to provide credit card information over email/internet? Do you think, using a credit card of local business is risky? Why? Why not?