Personal Finance Courses: Credit

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1.
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%.
2.
If you don't plan to be paying off your credit card balance every month, then the interest rate will be more important to you than if you did pay off your balance each month.
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True. Since you will be carrying a balance, that means you will be paying interest every month. You will want the interest rate to be as low as possible.
3.
An example of revolving credit is _______.
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A credit card agreement. Credit card agreements are an example of revolving credit.
4.
To check your credit, you should get a credit report from just one of the three credit bureaus.
Choose wisely. There is only one correct answer.
False. You should check the reports from all three credit bureaus, as they may have different information from different creditors.
5.
Debt collectors do not have to disclose the fact that they are debt collectors when they contact you about a past-due debt.
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False. By law, they must.
6.
Some credit cards target those with bad credit. These credit cards usually have which of the following?
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All of the above. Generally, all of these rates and fees will be in effect. Additional fees may also be charged.
7.
The higher your credit score is, the _______ the interest rates will be on loans you take out.
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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.