Credit Basics and Consumer Rights Quiz

What is credit?

• Free money from the government

• Borrowed money that must be paid back with interest

• A savings account

• A type of loan that doesn’t require repayment

What is an annual percentage rate (APR)?

• A credit score rating

• The total amount you owe

• The interest rate charged yearly for using credit

• A fee for opening a credit card

Which of the following affects your credit score?

• Your hair color

• Whether you pay your bills on time

• The number of friends you have

• Your job title

What is a grace period on a credit card?

• Time given to return an item

• A time when no interest is charged if the balance is paid in full

• The minimum amount due

• The time after your card is canceled

What does “minimum payment” mean?

• The total amount you owe

• The late fee on your account

• The smallest amount you must pay by the due date

• A bonus payment

What happens if you only pay the minimum on your credit card each month?

• You avoid all interest

• You pay off your debt faster

• You build strong credit

• You pay more over time due to interest

What is a finance charge?

• A refund

• The amount of money you borrow

• The cost of borrowing money, including interest and fees

• A reward for early payment

Which of these can help you avoid paying interest on a credit card?

• Paying the minimum

• Paying late

• Paying in full each month

• Ignoring your bill

A high APR means:

• You’ll pay less interest

• Your credit score will go up

• You’ll pay more interest over time

• Your minimum payment will disappear

Which of the following is true about credit unions?

• They are for-profit institutions owned by shareholders

• Anyone can join a credit union with no requirements

• They are nonprofit and usually offer lower loan rates and fees

• They always charge higher interest rates than banks