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Personal Finance Courses: Credit

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1.
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.
Choose wisely. There is only one correct answer.
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.
2.
Having no credit profile can result in you being denied credit.
Choose wisely. There is only one correct answer.
True. Creditors like to know that you have a history of using credit.
3.
What is the main reason behind using a credit card to buy things that you already have cash for?
Choose wisely. There is only one correct answer.
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.
4.
Which of the following is a good reason to have a credit card?
Choose wisely. There is only one correct answer.
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.
Credit is free money.
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False. Credit is a loan of money, meaning you must pay it back with interest after using it. It is not free money.
6.
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.
7.
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.