Avoiding the Credit Trap

Which of the following is considered a positive aspect of credit?

• Big debts help you build a positive credit rating.

• A credit card makes day-to-day purchases more convenient.

• Your financial capabilities are determined by the number of credit cards you own.

• You can just pay the minimum balance every month.

What does APR mean?

• Annual percentage rate

• Applied percentage rate

• All-banks percentage rate

• Actual percentage rate

The average new college graduate today has more than ___ in debts, including credit cards, student loans, and other debts, such as car loans.

• $10,000

• $15,000

• $20,000

• $25,000

Many people have big debts and are struggling to get by financially because they make only the _______ on their credit cards each month.

Almost _____ people in the United States file for bankruptcy each year.

• 1.0 million

• 1.5 million

• 2.0 million

• 2.5 million

If you get a cash advance on your credit card, which of the following is true?

• You will not be charged interest on cash advances

• You will not be required to pay it back for 6 months

• Higher interest rate than if you bought something with the credit card

• All of the above

When you buy something on ______, the store holds it until you have paid for it in full.

On a credit card, the interest is applied to:

• current purchases

• any purchase

• future purchases

• remaining balance on anything not previously paid

In order to apply for a credit card, you must show which of the following?

• You are 16 years old.

• Your expenses exceed your income.

• The reason you need the card.

• You have a checking or saving account.

Once you've applied, the company has ___ days to respond to your application.

• 30

• 10

• 90

• 5