Personal Finance Courses: Credit

Test your knowledge

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1.
The "principal" of a loan is the _______.
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Original amount borrowed. The principal is the original amount borrowed.
2.
Which of the following alternatives to a credit card would save you the most money in interest and fees?
Choose wisely. There is only one correct answer.
Creating a savings plan to pay for an item without using credit. This option would save you the most money. Its only downside is that it might take you several months to save up the money.
3.
Which of the following is probably the wisest use of credit?
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Pay off higher-interest loans before lower-interest loans.
4.
What is the minimum FICO score that is usually considered a safe risk?
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670. At 670, a person is considered a safe risk and typically receives a loan without a problem and at a low interest rate.
5.
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.
6.
Which of the following actions are outside collection agencies legally allowed to take against you?
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None of the above. All these actions are illegal.
7.
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.