Before you can get a handle on credit card debt, you need to understand how and why it builds up in the first place. Your credit limit, payment amount, and APR all play a part in this type of debt.
Watch the video to start Understanding Credit Card Debt, then test your knowledge at the end of the lesson.
Which of the following is not true about minimum payments?
A. They come with an extra 3-day grace period
B. They equal the required amount due for that billing cycle
C. They are usually 2.5% to 3% of your total balance
D. When you spend more of your credit, they go up
When it comes to credit card APR, you can expect:
A. To pay more the higher your credit score is
B. The Fed to raise your rate each consecutive month
C. A higher rate than with loans and mortgages
D. To pay less the longer you keep an account open
If there is a remaining balance left after the grace period, interest charges usually get applied daily and compound.
A. True
B. False
Summarize your current accounts with the Credit Card Debt Worksheet below: