Choose wisely. There is only one correct answer to each question.
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1.
If the annual percentage rate on your credit card is 18%, you will pay 18% interest on each month's balance.
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%.
2.
What is the most effective action you can take against a creditor?
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.
3.
What is the limit on the amount of credit you can get?
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.
4.
Shopping for a good credit card deal is easy because there are only a few large organizations that offer credit cards.
False. There are thousands of banks, credit unions, and other organizations that offer credit cards.
5.
The higher your credit score is, the _______ the interest rates will be on loans you take out.
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.
6.
Which of the following is a good reason to have a credit card?
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.
7.
It is more cost effective for you to buy something outright than pay for it with credit.