Test your knowledge

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

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Review your answers below to learn more.

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.

What is the limit on the amount of credit you can get?

It depends on what the credit agreement states.

It is unlimited.

It varies by state.

$1,000

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.

If you have bad credit and receive a credit card offer tailored to those with bad credit, what can you expect the interest rate to be like?

Very high

Very low

Comparable to the industry average

None of the above

Very high. Because you are deemed a risk, your interest rate would be quite high.

Why might it be a good idea to apply for your first credit card at your bank or credit union?

It has the lowest interest rates.

It already has a sense of your financial health.

It is the only company that will work with you.

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.

When it comes to negative information in your credit report, most negative information will appear in your credit report for _______.

One year

Three years

Five years

Seven years

Seven years. Although some negative information can appear for longer, most negative information will appear in your credit report for seven years.

Opening several new credit accounts in a short period of time can result in an improved credit score.

True

False

False. Opening several new credit accounts in a short period of time can result in a lowered credit score.

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.