Personal Finance Courses: Credit

Test your knowledge

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

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1.
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.
2.
The higher your credit score is, the _______ the interest rates will be on loans you take out.
Choose wisely. There is only one correct answer.
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.
3.
Paying the minimum monthly payment on your credit is affordable, but a major downside is that it takes much longer to pay off.
Choose wisely. There is only one correct answer.
True. The less you pay each month, the longer it takes to pay off. Plus, you pay a huge amount of interest.
4.
Which of the following is probably the wisest use of credit?
Choose wisely. There is only one correct answer.
Pay off higher-interest loans before lower-interest loans.
5.
What is the limit on the amount of credit you can get?
Choose wisely. There is only one correct answer.
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.
6.
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.
7.
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?
Choose wisely. There is only one correct answer.
Very high. Because you are deemed a risk, your interest rate would be quite high.