What does a credit card issuer provide to an approved cardholder?
A A deposit account balance
B A guaranteed cash grant
C A revolving credit line
D A prepaid gift balance
Answer: C. A revolving credit line. A credit card provides access to a revolving credit facility within the issuer’s approved terms and limit.
When a cardholder buys an item with credit, whose funds are initially used?
A Credit extended by issuer
B A debit account balance
C A government subsidy
D A merchant’s personal loan
Answer: A. Credit extended by issuer. A credit-card purchase uses credit made available by the issuer; the cardholder later repays the amount.
What does revolving credit allow after repayment?
A Erase the original account
B Avoid every card fee
C Increase income automatically
D Reuse available credit
Answer: D. Reuse available credit. As the outstanding balance is repaid, available credit can generally be used again, subject to the account terms.
Which transaction is a common credit-card use?
A Opening a savings deposit
B Paying a merchant
C Receiving a salary
D Transferring property ownership
Answer: B. Paying a merchant. Credit cards are commonly used to pay merchants for goods and services.
Who is the primary cardholder?
A Any store employee
B Person named on main account
C The payment network
D A credit bureau
Answer: B. Person named on main account. The primary cardholder is the customer in whose name the card account is opened.
What is an add-on card generally linked to?
A A separate credit bureau
B A merchant’s cash register
C A prepaid transit ticket
D A primary card account
Answer: D. A primary card account. An add-on card is issued under a primary cardholder’s account, according to issuer terms.
Which term describes the maximum revolving amount set for an account?
A Credit limit
B Billing cycle
C Grace period
D Cashback rate
Answer: A. Credit limit. The credit limit is the maximum amount of revolving credit assigned to the account.
What can reduce the credit available for new purchases?
A An old paper statement
B A rewards catalogue
C Unpaid or pending transactions
D A closed merchant outlet
Answer: C. Unpaid or pending transactions. Posted balances and some pending authorizations can reduce the amount available to spend.
How does a merchant usually receive payment after a card purchase?
A From a credit bureau
B From the cardholder’s salary
C Through a utility bill
D Through the payment system
Answer: D. Through the payment system. Payment networks and financial institutions route and settle card transactions between the merchant and issuer.
Which document summarizes account activity for a period?
A Insurance certificate
B Credit-card statement
C Tax return
D Employment contract
Answer: B. Credit-card statement. A card statement summarizes transactions, balances, fees, and payment information for the account.
What does a billing cycle represent?
A Time to replace a card
B Duration of a cash withdrawal
C Period grouped into one statement
D A loan approval window
Answer: C. Period grouped into one statement. A billing cycle is the period of account activity summarized in a statement.
When is a statement date usually relevant?
A At the cycle’s closing point
B When the card is manufactured
C When a merchant opens
D After every password change
Answer: A. At the cycle’s closing point. The statement date marks the end of a billing period and the preparation of its statement.
What does the payment due date specify?
A Deadline for required payment
B Date rewards always expire
C Date the card was issued
D Start of a new account
Answer: A. Deadline for required payment. The due date is the deadline shown for paying the amount required under the account terms.
Which amount reflects the full bill shown for a statement period?
A Available credit
B Cash withdrawal limit
C Reward point balance
D Total amount due
Answer: D. Total amount due. The total amount due is the amount payable according to the statement, adjusted for credited payments or refunds.
How does an available credit figure differ from a credit limit?
A It lists yearly card fees
B It reflects remaining usable credit
C It equals total rewards
D It shows the billing date
Answer: B. It reflects remaining usable credit. Available credit is the remaining amount that can be used within the assigned limit.
What does the minimum amount due represent?
A The full credit limit
B All future purchases
C Smallest stated payment amount
D The reward redemption value
Answer: C. Smallest stated payment amount. The minimum amount due is the minimum part of the bill specified for payment by the due date.
If only the minimum is paid, what can happen to the unpaid balance?
A It disappears automatically
B Interest may continue accruing
C It becomes reward points
D The issuer must waive it
Answer: B. Interest may continue accruing. Paying only the minimum can leave an outstanding balance that accrues finance charges under the card terms.
Which condition commonly preserves an interest-free purchase period?
A Paying full statement balance
B Paying only one instalment
C Making a cash withdrawal
D Missing the payment date
Answer: A. Paying full statement balance. Where a grace period applies, paying the full amount by the due date can preserve interest-free treatment for eligible purchases.
What is a cash advance on a credit card?
A A cashback reward
B A bank deposit receipt
C A reversed purchase
D Cash borrowed against card credit
Answer: D. Cash borrowed against card credit. A cash advance draws cash using the credit-card account and may have separate charges and interest terms.
Why can a cash advance cost more than a purchase?
A It always earns extra points
B It increases the credit limit
C Separate fees or interest terms
D It replaces the monthly statement
Answer: C. Separate fees or interest terms. Cash advances may have distinct fees and finance-charge rules; card terms should be checked.
Which feature distinguishes a credit card from a debit card?
A Uses issuer-provided credit
B It always spends cash deposits
C It has no account terms
D It cannot make purchases
Answer: A. Uses issuer-provided credit. A credit card uses an issuer-provided credit line; a debit card generally accesses funds in a linked deposit account.
What may secure a secured credit card?
A A reward points balance
B A merchant discount
C A pledged deposit or collateral
D A mobile phone number
Answer: C. A pledged deposit or collateral. A secured card is backed by collateral, often a deposit, subject to the issuer’s arrangement.
Where can a virtual credit card number be used?
A Only at cash machines
B Only for paper statements
C Only at bank branches
D In supported digital transactions
Answer: D. In supported digital transactions. A virtual card form factor can be used for digital transactions accepted by the issuer and merchant.
What should a cardholder do with a one-time verification code?
A Post it publicly
B Keep it confidential
C Share it with callers
D Write it on the card
Answer: B. Keep it confidential. One-time codes authenticate transactions or account actions and should not be shared with others.
Which technology enables many tap-to-pay card transactions?
A Satellite navigation
B Optical character recognition
C Near-field communication
D Shortwave radio
Answer: C. Near-field communication. Contactless card payments commonly use near-field communication over a short distance.
What should happen after spotting an unfamiliar card transaction?
A Wait for annual renewal
B Share card details online
C Ignore every statement
D Contact the issuer promptly
Answer: D. Contact the issuer promptly. Promptly report an unfamiliar transaction through the issuer’s official channel and follow its dispute process.
If a card is lost, what is a sensible immediate step?
A Wait for the next statement
B Report it and request blocking
C Post its number online
D Keep using its details
Answer: B. Report it and request blocking. Reporting a lost card promptly lets the issuer block or secure it and explain next steps.
What do Most Important Terms and Conditions explain?
A Cardholder and issuer terms
B A merchant’s store layout
C Credit bureau software code
D A card’s manufacturing process
Answer: A. Cardholder and issuer terms. MITC documents describe important responsibilities, charges, and conditions for card issuance and use.
Why review a card statement each cycle?
A Increase the account limit
B Change the card network
C Remove all annual fees
D Check charges and payment details
Answer: D. Check charges and payment details. Reviewing statements can help identify errors, unfamiliar transactions, fees, and upcoming payment obligations.
What is a recurring card payment?
A Repeated charge under authorization
B One-time cash withdrawal
C A card replacement request
D A credit report inquiry
Answer: A. Repeated charge under authorization. A recurring payment is charged repeatedly under an arrangement authorized by the cardholder.
Which factor can affect a foreign-currency card transaction’s final cost?
A Card colour
B Statement font size
C Issuer exchange-rate terms
D Merchant’s opening hours
Answer: C. Issuer exchange-rate terms. Exchange conversion and any related charges depend on the card and issuer terms.
What does an over-limit transaction exceed?
A The billing period length
B The assigned credit limit
C The annual fee amount
D The card’s expiry month
Answer: B. The assigned credit limit. An over-limit transaction would take the account beyond its assigned credit limit, subject to issuer controls and terms.
Which institution typically issues a credit card account?
A A payment terminal maker
B A bank or eligible issuer
C A credit bureau
D A retail cashier
Answer: B. A bank or eligible issuer. A bank or other eligible card issuer opens and administers the account.
What role does a card network commonly perform?
A Sets every cardholder’s salary
B Issues all bank deposits
C Writes credit reports
D Routes payment messages
Answer: D. Routes payment messages. A card network helps route transaction messages among participating institutions.
What does APR express for a credit-card balance?
A Amount of available credit
B Number of yearly statements
C Annualized borrowing cost rate
D Total rewards earned
Answer: C. Annualized borrowing cost rate. APR is an annualized rate used to describe borrowing cost; the applied method and balance category matter.
Which fee may apply simply for holding a card?
A Annual membership fee
B Merchant refund amount
C Statement page charge always
D Credit bureau inquiry fee
Answer: A. Annual membership fee. Some cards have an annual membership fee, which should be disclosed in the card’s terms.
How should a cardholder approach a billing error?
A Pay an unknown merchant
B Delete the statement
C Share the card PIN
D Raise a formal dispute
Answer: D. Raise a formal dispute. Use the issuer’s official dispute process and keep supporting records.
What balance may be used when calculating finance charges?
A Unused reward points
B Outstanding balance under terms
C The card’s printed limit
D The merchant’s daily sales
Answer: B. Outstanding balance under terms. Finance-charge calculations depend on the applicable card terms and the outstanding balance.
Who is generally responsible for an add-on card’s account balance?
A The primary account holder
B The card network alone
C The merchant’s cashier
D The credit bureau
Answer: A. The primary account holder. The primary cardholder is generally responsible for the account, including add-on card use, subject to issuer terms and law.
What can a cardholder check before accepting a new card?
A Only its printed colour
B Only the reward logo
C Fees, rates, and conditions
D The merchant’s tax return
Answer: C. Fees, rates, and conditions. Reviewing fees, rates, limits, and conditions helps explain how the card works.
Where does a cardholder usually find the account’s due date?
A On a store receipt only
B Inside a reward catalogue
C On a payment terminal
D On the billing statement
Answer: D. On the billing statement. The billing statement identifies the amount due and its payment deadline.
Which payment method may be listed by an issuer?
A Reward points only
B Cash mailed without record
C Bank transfer or autopay
D A credit bureau inquiry
Answer: C. Bank transfer or autopay. Issuers can offer payment methods such as bank transfer or authorized automatic payment, depending on the account.
How can timely payments affect a credit history?
A They erase the account record
B They record repayment behaviour
C They guarantee future approval
D They remove every inquiry
Answer: B. They record repayment behaviour. Credit reports can include payment history, which lenders may consider when assessing applications.
What information is commonly found in a credit-card statement?
A Transactions and balance details
B A full credit bureau database
C A merchant’s employee roster
D The issuer’s private passwords
Answer: A. Transactions and balance details. Statements normally show transactions and account balances, along with charges and payment information.
When may a grace period stop applying to purchases?
A When a chip is present
B When rewards are redeemed
C When prior balance remains unpaid
D When a statement is opened
Answer: C. When prior balance remains unpaid. If the prior statement balance is not fully paid, the interest-free period may be suspended under the card terms.
Which amount should not be confused with the total amount due?
A Statement closing date
B Minimum amount due
C Merchant category code
D Card expiry date
Answer: B. Minimum amount due. The minimum amount due is only a portion of the total statement amount.
Why may purchases and cash advances have different charges?
A They use different card colours
B They post to different bureaus
C They have different owners
D They are separate transaction types
Answer: D. They are separate transaction types. Issuers may apply different charges and rates to purchases and cash advances.
What is a credit card not?
A A source of earned income
B A payment instrument
C A revolving credit facility
D An account with terms
Answer: A. A source of earned income. Credit-card spending is borrowed credit that must be repaid; it is not earned income.
How can cardholders use a credit line responsibly?
A Spend up to every limit
B Ignore statement dates
C Track spending and repayment
D Share credentials for convenience
Answer: C. Track spending and repayment. Tracking purchases and payment obligations helps cardholders manage use within their means.
What should a cardholder do as a printed expiry date approaches?
A Ignore account notices
B Follow issuer replacement steps
C Share the card’s security code
D Create another credit report
Answer: B. Follow issuer replacement steps. The issuer can explain how and when a replacement card is issued; expiry of the physical card does not by itself settle the account balance.