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1.
What is the main reason behind using a credit card to buy things that you already have cash for?
It helps build a good credit record. Having the money already on hand makes it easy to pay your bill, and in the future, you will benefit from the enhanced credit history.
2.
A personal loan from a bank or credit union works the same way as a credit card.
False. Personal loans do not work the same way as credit cards. They have set limits and a schedule of repayment.
3.
A secured credit card is one that is backed by some asset.
True. The asset protects the lender if you default on your payments.
4.
If you want to establish credit but haven't yet, potential lenders can make a judgment about your creditworthiness based on other factors.
True. Lenders can look at your history of paying bills, your employment history, and your housing history.
5.
If you have accounts with a financial institution such as a bank or credit union, it can be advantageous to apply for your first credit card there.
True. The institution will have a sense of how you handle money.