Mini$-$Case B: $(3$ marks$)$

Ashley is starting Concordia in September and is ready to apply for her first credit card. Ashley believes she knows a lot about credit cards but also knows there are a lot of myths out there.

a$)$ Based on Ashely$$s statements, highlight AND underline which are True or False.

$(1\mathrm{.}5$ marks for $\mathrm{.}25$ marks each$)$

i$)$ A cash advance is a loan offered by your credit card issuer; when you take a cash advance on your credit card, it can impact your credit score based on how much money you are borrowing relative to your overall credit limit$.$ True or False

ii$)$ Credit cards have grace periods, however if you do not pay off your statement balance in full before your grace period ends, you lose the grace period on your credit card which means that both your balance due and any new purchases will begin accruing interest immediately. True or False

iii$)$ Your payment history is important because it makes up $30\%$ of your credit score, which banks and other lenders use to determine whether you are a risky credit borrower.

True or False

iv$)$ When you receive your credit card bill, there are typically three amounts you can pay: the minimum due, the statement balance and the current balance. Cardholders must at least pay the minimum amount due to keep an account in good standing. True or False

v$)$ Credit card payments are processed during business days, and depending on your method of payment, it could take a few days to process. Your payment needs to be received by the due date to avoid being charged interest. True or False

vi$)$ All transactions qualify for grace periods: cash advances and balance transfers.

True or False

b$)$ Ashley$$s friend Madison has four credit cards, each having a $$1,000$ credit card limit for a total credit limit of $$4,000.$ If Madison maximizes one of the four credit cards to the limit of $$1,000$ and can$$t pay it off, will it hurt her credit score if she closes the other three credit cards which have a zero balance? $(\mathrm{.}5$ marks$)$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

c$)$ Ashley$$s friend Emily has $2$ credit cards $($a VISA and a Mastercard$)$ with a limit of $$1,000$ each. Emily only uses her VISA as it gives her great travel points every time she uses it$.$ She pays off the card in full each month prior to the due date. Emily, however, just received a letter from Mastercard saying they are closing the credit card due to inactivity. Emily was purposefully not using her Mastercard as she only had this card for emergency purposes. Will the closure of this credit card for non$-$use, hurt Emily$$s credit score or help her?

$(\mathrm{.}5$ marks$)$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

d$)$ What could Emily have done to avoid receiving such a letter? $(\mathrm{.}5$ marks$)$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$