Personal Finance Courses: Credit

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

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1.
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.
2.
Which of the following actions are outside collection agencies legally allowed to take against you?
Choose wisely. There is only one correct answer.
None of the above. All these actions are illegal.
3.
If the annual percentage rate on your credit card is 18%, you will pay 18% interest on each month's balance.
Choose wisely. There is only one correct answer.
False. The APR refers to the interest rate for the whole year. For this month, it would be only 1/12 of that, which would be 1.5%.
4.
Which of the following is probably the wisest use of credit?
Choose wisely. There is only one correct answer.
Pay off higher-interest loans before lower-interest loans.
5.
Shopping for a good credit card deal is easy because there are only a few large organizations that offer credit cards.
Choose wisely. There is only one correct answer.
False. There are thousands of banks, credit unions, and other organizations that offer credit cards.
6.
What is the limit on the amount of credit you can get?
Choose wisely. There is only one correct answer.
It depends on what the credit agreement states. The credit agreement that you sign when applying for credit will state how much you can get. Often, this amount will rise over time if you are responsible with it.
7.
Some credit cards target those with bad credit. These credit cards usually have which of the following?
Choose wisely. There is only one correct answer.
All of the above. Generally, all of these rates and fees will be in effect. Additional fees may also be charged.