Personal Finance Courses: Credit

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1.
An example of revolving credit is _______.
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A credit card agreement. Credit card agreements are an example of revolving credit.
2.
Which of the following is a good reason to have a credit card?
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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.
3.
If you don't plan to be paying off your credit card balance every month, then the interest rate will be more important to you than if you did pay off your balance each month.
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True. Since you will be carrying a balance, that means you will be paying interest every month. You will want the interest rate to be as low as possible.
4.
Which of the following actions are outside collection agencies legally allowed to take against you?
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None of the above. All these actions are illegal.
5.
A credit card's annual percentage rate is _______.
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The interest rate you must pay over the course of a year. The APR is what you would pay over a whole year. What you pay each month on your card is 1/12 of that.
6.
Which of the following is the largest part of your FICO score?
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Payment history. Your payment history carries more weight than any other measure.
7.
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.