Financial Literacy Quiz

A credit card offer comes in the mail with the bold print "0% A.P.R. for New Accounts." Which important piece of information should you find before thinking about signing up? Mark only one oval.

• Can I get two or more cards with this offer?

• Can I pay my credit card bill online?

• What is the A.P.R. after the introductory period?

• What kind of designs can I get on my card?

The average APR for a payday loan is closest to ... Mark only one oval.

• 0%

• 5%

• 25%

• 400%

Which of these credit card payback strategies would result in you paying the HIGHEST total amount?

• Paying 20% of your credit card balance every month on time

• Paying off your credit card bill in full every month

• Making the minimum payment (3% of your credit card balance) every month on time

• Making the minimum payment (3% of your credit card balance) every month with an occasional late payment

Why would credit card companies prefer that their cardholders make the minimum monthly payment every month rather than paying their total balance in full?

• This is required by federal law for tax purposes

• This allows the card holder to pay their bill quickly and close the card when they're ready

• This enables the credit card company to make more money on interest

• This helps cardholders develop financial independence

Based on the Card Statement above, which of the following statements is TRUE?

• The cardholder is carrying a balance over from the last period.

• The cardholder was charged interest on her balances for the last period because she made her payment on time.

• If the cardholder makes her minimum payment of $35.00 by the due date, she will NOT be charged interest on her balances.

• If the cardholder pays $523.20 by the due date on the bill, she will pay NO interest to the credit card company.

Based on the Card Statement above, how much credit does this cardholder have available to use?

• $1686.15

• $523.20

• $1576.80

• $2100

Which of the following statements comparing credit and debit cards is TRUE? Mark only one oval.

• Far more businesses accept credit cards than debit cards

• Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard

• Credit card companies provide you with a monthly statement, while debit cards do not

• With debit cards, you're spending your own money at point of sale, while with credit cards, you're promising to pay back the money eventually

When loans are amortized, monthly payments are _______ , while the amount of your monthly payment applied to interest _______ and the amount of your monthly payment applied to the principal _______ over time. Mark only one oval.

• Constant, Increases, Increases

• Constant, Decreases, Increases

• Variable, Decreases, Increases

• Variable, Decreases, Decreases

Credit card disclosure: "Your due date is at least 25 days after the end of the billing cycle. We will not charge you interest on new purchases provided that you have paid your previous balance in full by the due date each month." Identify the true statement. Mark only one oval.

• If you make the minimum payment on your card within the 25 day period, the credit card company will not charge you interest

• If you pay your previous balance in full after the due date, the credit card company will not charge you interest

• 25 days is an exceptionally long period without paying a credit card bill

• The 25 days after the end of the billing cycle is referred to as the grace period

A loan with a shorter term length will have __________ monthly payments, and you will pay __________ in total interest.

• higher, less

• higher, more

• lower, less

• lower, more