Personal Finance Courses: Credit

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
What is the name for the credit card fee that is charged to you when you take money out of your card?
Choose wisely. There is only one correct answer.
Cash advance fee. This fee is charged for cash advances made on your card.
2.
It is possible to use a credit card to earn more than you pay on it.
Choose wisely. There is only one correct answer.
True. You can earn rewards while paying your balance in full each month and avoiding fees.
3.
The "principal" of a loan is the _______.
Choose wisely. There is only one correct answer.
Original amount borrowed. The principal is the original amount borrowed.
4.
What collection efforts can a creditor that obtains a court judgment against you legally do?
Choose wisely. There is only one correct answer.
The creditor can take steps to garnish your wages and seize assets, such as bank accounts. The creditor can also file a lien against any real estate you own.
5.
What is the main reason behind using a credit card to buy things that you already have cash for?
Choose wisely. There is only one correct answer.
It helps build a good credit record. Having the money already on hand makes it easy to pay your bill, and in the future, you will benefit from the enhanced credit history.
6.
If you are wealthy and don't need to take out any loans, it is still a good idea to have good credit.
Choose wisely. There is only one correct answer.
True. You don't know for sure that you will still have your money in the future.
7.
The higher your credit score is, the _______ the interest rates will be on loans you take out.
Choose wisely. There is only one correct answer.
Lower. If you have a high credit score, that tells lenders that you are a responsible borrower, and they will charge you a lower interest rate than if your credit score were low.