Credit Test Review

Which is true regarding many people who struggle with credit card debt?

• Most is a result of ATM fees

• Small purchases add up quicker than most people think

• Low interest rates can hurt your credit score

• Your credit score has a huge impact on your account balance

A purchase put on a credit card is...

• always interest free

• often a way to hurt your credit score

• a short term loan

• independent of your credit score

Which is NOT true regarding a credit card's APR?

• "APR" is also known as interest

• If you miss a payment, your APR may increase

• If you pay off your entire balance each month, your APR is irrelevant

• All of the above are true

Where/how can you go to get a credit card?

• The bank

• A mall/retail store, such as Macys or J. Crew

• An offer you receive in the mail

• All of the above are acceptable

Which of the following is a disadvantage of owning a credit card?

• The lender will never cover you if someone makes a fraudulent purchase

• It is linked directly to your checking account

• People tend to spend more using credit than using cash

• All credit cards charge an annual fee

Which of the following is not one of the "three C's" of creditworthiness?

• Calculations

• Capacity

• Capital

• Character

Which is true regarding your credit score?

• People like moneylenders, landlords, etc. will want to see your credit score

• Pulling your credit score lowers your credit card (slightly)

• People with higher credit scores receive better interest rates than those with lower credit scores

• All of the above are true

Which of the following is NOT true regarding credit cards

• You can use them to withdraw money from an ATM, but usually for a LARGE fee

• Only cards with annual fees offer incentives such as airline miles and cash back

• You must be 18 to open a credit card

• Making only minimum payments may lead to DECADES of debt

Why is it a good idea to have a credit card?

• They help you build credit

• If you ALWAYS pay your ENTIRE balance, you get "rewards for free" (i.e. free cash back, airline miles, etc.)

• Unlike debit cards, you are usually protected against fraudulent charges

• All of the above

Which is true regarding moneylenders (loan sharks)?

• The longer the term, the more money they make in interest from you

• They always prefer a higher interest rate over a longer term

• They only lend money to people with good credit

• Your credit history is irrelevant to them