Personal Finance Courses: Credit

Test your knowledge

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

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1.
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.
2.
If you have to deposit a few hundred dollars into your bank in order to get a credit card, what kind of card is that called?
Choose wisely. There is only one correct answer.
Secured. Secured cards require you to deposit money. This is the money that you will be drawing from with your card.
3.
If you have questions about the types of collection practices that are allowed, contact the _______ in your state to see what the state law allows.
Choose wisely. There is only one correct answer.
Consumer protection bureau. Your state's consumer protection bureau will have information about state laws governing credit collection practices that operate together with federal regulations.
4.
Which of the following is the largest part of your FICO score?
Choose wisely. There is only one correct answer.
Payment history. Your payment history carries more weight than any other measure.
5.
It is more cost effective for you to buy something outright than pay for it with credit.
Choose wisely. There is only one correct answer.
True. You can avoid finance charges this way.
6.
Credit is free money.
Choose wisely. There is only one correct answer.
False. Credit is a loan of money, meaning you must pay it back with interest after using it. It is not free money.
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.