Question

1. which of the following is a common risk associated with credit card use? a unlimited credit limit b accumulating high - interest debt c increased savings due to rewards d guaranteed approval for loans 2. credit cards always charge interest on purchases. t true f false 3. what is one advantage of using credit cards? a unlimited spending without interest b immediate cash withdrawal without fees c building a credit history d guaranteed approval for all purchases 4. which card type requires you to have available funds in your account for transactions? a neither card type b debit cards c credit cards d both card types 5. which card type usually has higher fraud protection? a debit cards b credit cards c both have equal protection d neither has fraud protection

Explanation:

1. Credit cards often have high - interest rates, and if not paid off promptly, high - interest debt can accumulate. Unlimited credit limit is not a risk per se, increased savings due to rewards is a benefit, and guaranteed loan approval is false.
2. Credit cards don't always charge interest on purchases. If the balance is paid in full within the grace period, no interest is charged.
3. One of the key advantages of using credit cards is building a credit history, which is important for future borrowing. There is no unlimited spending without interest, cash withdrawals usually have fees, and there is no guaranteed approval for all purchases.
4. Debit cards draw on available funds in the account for transactions, while credit cards allow borrowing up to a credit limit.
5. Credit cards generally offer higher fraud protection as consumers are often not liable for unauthorized charges, while debit card fraud protection can vary and may be more restrictive in some cases.

Answer:

1. B. Accumulating high - interest debt
2. F. False
3. C. Building a credit history
4. B. Debit cards
5. B. Credit cards