Test your knowledge

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

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It is possible to use a credit card to earn more than you pay on it.

True

False

True. You can earn rewards while paying your balance in full each month and avoiding fees.

Credit is free money.

True

False

False. Credit is a loan of money, meaning you must pay it back with interest after using it. It is not free money.

What is the main reason behind using a credit card to buy things that you already have cash for?

It helps build a good credit record.

It prevents you from using too much credit.

There is no point in using a credit card to buy things you already have cash for.

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.

What is the most effective action you can take against a creditor?

Ignore them as long as possible

Sue them

Deal with them as soon as possible

Deceive them

Deal with them as soon as possible. The sooner you deal with them, the better the chance of sparing your credit and reducing the costs of a fight.

If you are wealthy and don't need to take out any loans, it is still a good idea to have good credit.

True

False

True. You don't know for sure that you will still have your money in the future.

Credit cards may charge fees for which of the following?

Late payments

Payments made over the phone

Convenience checks

All of the above

All of the above. These are just some of the many fees that credit cards can charge you for various uses.

The highest FICO score possible is _______.

300

700

850

1000

850. At present, this is the highest possible score. You want to get as close as possible to this score. The closer you get, the more privileges you get when it comes to taking out loans.