Course Quiz - Financial Fitness Center

1.

As a general rule, credit exists to enable you to buy things that _______.

You can afford to buy right now

You cannot afford to buy right now

You should not buy at all

You should buy

You cannot afford to buy right now. Credit exists to help you buy things you can't afford right now. While the other choices may or may not be true, they are not the reason credit exists in the first place.

2.

Which of the following is probably the wisest use of credit?

If you can buy something with cash, use credit instead.

Pay off higher-interest loans before lower-interest loans.

Make minimum payments each month.

Consolidate multiple lower interest loans into a single loan, even at a slightly higher rate.

Pay off higher-interest loans before lower-interest loans.

3.

What is the minimum FICO score that is usually considered a safe risk?

300

450

670

820

670. At 670, a person is considered a safe risk and typically receives a loan without a problem and at a low interest rate.

4.

Which of the following is a good reason to have a credit card?

Many airlines and high-end merchants are no longer accepting cash payment.

A credit card can be valuable in case an emergency exceeds your available funds on hand.

A credit card, especially if gold or platinum, can make you look successful in business settings.

A credit card is often a required form of secondary identification, in addition to a driver's license.

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.

5.

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.

6.

What is the name for the credit card fee that is charged to you when you take money out of your card?

Balance transfer fee

Overlimit fee

Currency fee

Cash advance fee

Cash advance fee. This fee is charged for cash advances made on your card.

7.

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?

Secured

Bank card

Department store card

Unsecured

Secured. Secured cards require you to deposit money. This is the money that you will be drawing from with your card.

Test your knowledge

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