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Introducing the Credit Card: Answer Guide

Exercise 2: How do credit cards work?

  • 1. True or false: You have to swipe a credit card to use it.
    1. True
    2. False
  • 2. Which parties participate in credit card processing?
    1. The issuer, the director, and the buyer
    2. The acquirer, the analyst, and the accountant
    3. The merchant, the acquirer, and the issuer
    4. The authorizer, the batcher, and the lender
  • 3. What are the steps of credit card processing?
    1. Authorization, batching, sorting, and funding
    2. Batching, acquiring, issuing, and lending
    3. Clearing, funding, batching, and selection
    4. Authorization, batching, clearing, and funding
  • 4. Which of the following is not a way to pay off a credit card?
    1. At a store or bank
    2. With another credit card
    3. On the phone
    4. All of these will work as credit card payment options
  • 5. What is the approximate minimum payment for a card with a $1,000 balance?
    1. $15
    2. $20
    3. $100
    4. $200
  • Explanation: This refers to the following statement (page 9): “Your minimum monthly payment…is usually 2% of the balance or $15 (whichever is higher).” 2% of $1,000 = .02 x $1,000 = $20

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