Credit Card and Financial Literacy Quiz

What is one advantage of using a credit card over cash?

• Credit cards have no interest.

• Credit cards allow you to build credit history.

• Credit cards give you free money.

• Credit cards have unlimited spending limits.

Which of the following is the most important factor in determining your credit score?

• Payment history

• Number of credit cards

• Income level

• Number of credit inquiries

If a person uses a credit card and doesn’t pay the full balance each month, what happens?

• They pay interest on the remaining balance.

• They increase their credit score immediately.

• They receive a discount on future purchases.

• They avoid all fees.

What is an APR in the context of a loan or credit card?

• Amount of loan payments required

• Annual cost of borrowing, including fees

• Additional percentage return on investment

• Average percentage rating of lenders

What is a key benefit of having an emergency fund?

• It helps pay for luxury items.

• It covers unexpected expenses without debt.

• It increases your credit score.

• It earns high interest.

Which of the following is the safest investment option?

• Savings account

• Stock market

• Real estate

• Cryptocurrency

Why is diversification important in investing?

• It guarantees a profit.

• It reduces the risk of losing all investments.

What is the difference between a stock and a bond?

• Stocks represent ownership; bonds represent a loan.

• Stocks are risk-free; bonds are riskier.

• Bonds have no maturity date; stocks do.

• Bonds pay dividends; stocks pay interest.

Which type of financial institution is member-owned and typically offers lower fees and loan rates?

• Commercial banks

• Credit unions

• Investment firms

• Payday lenders

Which financial service allows customers to buy now and pay over time, often with interest?

• Checking account

• Savings account

• Credit card

• Insurance