Course Quiz - Financial Fitness Center

1.

If the annual percentage rate on your credit card is 18%, you will pay 18% interest on each month's balance.

True

False

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.

Shopping for a good credit card deal is easy because there are only a few large organizations that offer credit cards.

True

False

False. There are thousands of banks, credit unions, and other organizations that offer credit cards.

3.

The higher your credit score is, the _______ the interest rates will be on loans you take out.

Higher

Lower

More stable

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.

4.

Some credit cards target those with bad credit. These credit cards usually have which of the following?

Very high interest rates

High fees for late payments

A high fee for getting a credit limit increase

All of the above

All of the above. Generally, all of these rates and fees will be in effect. Additional fees may also be charged.

5.

Credit is free money.

True

False

False. Credit is a loan of money, meaning you must pay it back with interest after using it. It is not free money.

6.

What collection efforts can a creditor that obtains a court judgment against you legally do?

The creditor is limited to letters and phone calls, but may call at all hours of the day and night.

The creditor is allowed to contact your employer directly to request payment.

After 60 days, the creditor can force you to sell your home.

The creditor can take steps to garnish your wages and seize assets, such as bank accounts.

The creditor can take steps to garnish your wages and seize assets, such as bank accounts. The creditor can also file a lien against any real estate you own.

7.

How long can a bankruptcy stay on your credit report?

Seven years

10 years

Seven or 10 years, depending on the type of bankruptcy

Indefinitely

Seven or 10 years, depending on the type of bankruptcy. At present, they can stay this long.

Test your knowledge

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