Financial Literacy Quiz

How can you check how much money you have in your current account?

• ATM/cashpoint

• Visiting your bank/building society branch

• Logging on to online banking

• Mobile banking app

What is the term used to describe your bank account if the balance drops below £0?

• Overdraft

• Bank Draft

• Over-balance

• Under-balance

Which of the following forms of borrowing do you think has the highest risk associated with it?

• Loan shark

• Credit card

• Payday loan

• Mortgage

What does the term Annual Percentage Rate mean in relation to a credit card?

• The interest rate you pay for borrowing money

• The amount you can borrow over a year without paying interest

• The minimum you must repay on the total amount you owe

• The percentage of your annual income that you must use to repay credit card debt

Why is your credit rating important?

Answer explanation

Your credit rating is important because it affects your ability to secure loans, credit cards, and favorable interest rates. A higher rating indicates reliability to lenders, potentially saving you money over time.

Which of the following can have a negative impact on your credit rating?

• Missed payments on a credit card

• Paying your phone bill by direct debit

• Living at the same address for a long time

• Having a credit card

Which of these is the most important utility bill to prioritise if you are in financial difficulties (pay first)?

• Council tax

• Digital TV package

• Water bill

• Broadband

How much is an annual colour TV licence to watch live or recorded TV?

• Between £100 and £200

• Less than £50

• More than £200

• Between £50 and £100

What’s the lowest interest you can get on a credit card?

Answer explanation

The lowest interest rate on a credit card can vary, but some cards offer rates as low as 0% introductory APR for a limited time. After that, typical rates range from 10% to 20%, depending on creditworthiness.