Personal Finance Courses: Credit

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

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1.
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.
2.
When it comes to negative information in your credit report, most negative information will appear in your credit report for _______.
Choose wisely. There is only one correct answer.
Seven years. Although some negative information can appear for longer, most negative information will appear in your credit report for seven years.
3.
Which of the following is a good reason to have a credit card?
Choose wisely. There is only one correct answer.
A credit card can be valuable in case an emergency exceeds your available funds on hand. A credit card can be a lifesaver if you have to pay for emergency expenses that go beyond your savings.
4.
As a general rule, credit exists to enable you to buy things that _______.
Choose wisely. There is only one correct answer.
You cannot afford to buy right now. Credit exists to help you buy things you can't afford right now. While the other choices may or may not be true, they are not the reason credit exists in the first place.
5.
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%.
6.
Opening several new credit accounts in a short period of time can result in an improved credit score.
Choose wisely. There is only one correct answer.
False. Opening several new credit accounts in a short period of time can result in a lowered credit score.
7.
Why might it be a good idea to apply for your first credit card at your bank or credit union?
Choose wisely. There is only one correct answer.
It already has a sense of your financial health. It already has a sense of your financial health. Because of this, it may be willing to offer you a credit card.