What do you need to know about

credit cards ?

Personal Finance

Corinne Ross, Spring 2003

 

Credit cards are becoming a popular way of paying for goods or services.  Using the following questions and hyperlinks, you  will define and list basic terms and topics associated with credit cards according to the answer key and the attached rubric.

 

Directions:  Open a blank Microsoft Word document.  Type your name, class period, and date in the top left corner.  Double space after the date and begin with question one.  Type the number of each question and the answers to the following questions.  Answers to the questions must be in complete sentences (unless instructed to list answers) in your own words.  Do not copy word for word from the websites.  Please double space between each answer. To find the answers click on the blue words in each question.  Please save your Word document on your floppy disk as “creditcardsheet.”  Print the document when you have completed each question.  Please use only the answers found in each hyperlink.  Do not use other sources.  DON’T FORGET TO SAVE YOUR WORK OFTEN! 

 

                                                                                               

Questions:

                                                                            

1.     What is a credit card and what type if information does it contain.                                                                                                                                                                                                      

2.  What does a credit card authorize a person named on the card to do?

 

3.     What does the first number on a credit card stand for?

 

4.     What is the name for the black stripe located on the back of a credit card?

 

5.     What is the definition of finance charge for a credit card?            

 

6.  List and explain the four types of interest rates associated with credit cards.

 

7.  What are the five steps you should take when shopping for a credit card.  List each step.

                       

8.  What are the three basic types of credit cards.  Give an example of each type.

 

9.  What tool does a lender use to check your credit history when applying for a credit card?

 

10. Bonus:  If you had a balance of $6000.00 on your credit card with a 21% APR.  How long would it take to pay it off if you only paid the minimum payment of $150.00 every month?

 

 

That’s all, don’t forget to save

and print your answers!

 

 

 

Credit Card Worksheet Rubric

 

Name____________________________

 

CRITERIA

ACCEPTABLE

NEEDS IMPROVEMENT

Format

Typed  and numbered all answers using MS Word (2)

Did not use MS WORD.  Answers not typed or numbered (1-0)

Completion

Answered 8 or more questions in complete sentences (unless instructed to list)

(2)

Answered 7 or less questions in complete sentences(unless instructed to list)

(1-0)

Content

Accuracy

Answered 7 or more  questions correctly

(9-8-7)

Answered six or less questions correctly 

(6-5-4-3-2-1-0)

English Mechanics

No spelling, grammatical or punctuation errors (1)

One or more English mechanical errors (0)

 

Points            ________/14

 

Bonus Point  ________/1

 

Total Points  ________

 

 

 

 

Teacher’s Key for Credit Card Worksheet

Answers are in red.

 

1.  What is a credit card and what type if information does it contain. 

                                           

A credit card is a thin plastic card.  Credit cards are usually 3 1/8 inches by 2 1/8 inches in size.  Credit cards contain identification information.

 

2.  What does a credit card authorize a person named on the card to do?

   

A credit card authorizes the person named on the card to charge purchases and services to an account.

 

3.  What does the first number on a credit card stand for?

 

The first number on a credit card represents the system of the card.

 

4. What is the name for the black stripe located on the back of a credit card?

 

The name of the black stripe on the back of a credit card is called the magnetic stripe or the magstripe.

 

5.  What is the definition of finance charge for a credit card?            

 

A finance charge on a credit card is the fee charged (interest) by the issuer of a credit card beyond the grace period. It is charged to the account if the credit card owner chooses to pay for purchases or cash advances over time.

 

6.  List and explain the four types of interest rates associated with credit cards.

 

 

7.  What are the five steps you should take when shopping for a credit card.  List each step.

 

 

8.  What are the three basic types of credit cards.  Give an example of each type.

 

The first type of credit card is a bank card.  Examples of a bank card include Visa, Mastercard, or Discover.  The second type of credit card is a travel and entertainment card.  Examples of travel and entertainment card are American Express and Diner’s Club.  The third type of card is a house card.  Example of a house cards include Sears, JcPenneys, to the Gap.

 

9.  What tool does a lender use to check your credit history when applying for a credit card?

 

A lender uses a credit report to check the credit history of a person applying for a credit card.

 

10. Bonus:  If you had a balance of $6000.00 on your credit card with a 21% APR.  How long would it take to pay it off if you only paid the minimum payment of $150.00 every month?

 

 It would take 69 months to pay off the $6000 balance on the credit card.