Credit Card Finance Charges and Billing Cycle Methods Quiz
Test your knowledge on credit card finance charges, billing cycle methods, APR, and more with this quiz!
#1
What are credit card finance charges?
Fees charged for using the credit card
Interest charged on the unpaid balance
Annual membership fees
Late payment fees
#2
Which of the following is not considered a finance charge?
Interest
Late fees
Annual membership fees
Balance transfer fees
#3
What is the purpose of the minimum payment on a credit card?
To reduce the outstanding balance to zero
To avoid late payment fees
To keep the account in good standing
To cover the entire balance
#4
What is the primary purpose of the Truth in Lending Act (TILA)?
To regulate credit card companies
To protect consumers by requiring clear disclosure of credit terms
To set maximum interest rates on credit cards
To eliminate finance charges on credit cards
#5
Which billing cycle method typically results in higher finance charges?
Average Daily Balance
Two-Cycle Billing
Previous Balance
Adjusted Balance
#6
What does the Average Daily Balance billing method involve?
Interest charged on the balance at the end of the billing cycle
Interest calculated on the average daily balance throughout the billing cycle
Interest charged on the total purchases made during the billing cycle
Interest waived for the first few days of the billing cycle
#7
In credit card billing, what does 'grace period' refer to?
The period during which interest is waived
The period during which purchases are interest-free
The period after the due date before interest is charged
The period to pay the annual membership fee
#8
Which factor does NOT typically influence the finance charges on a credit card?
Annual income
Interest rate
Outstanding balance
Billing cycle method
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