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.

A credit card's annual percentage rate is _______.

The interest rate you must pay over the course of a year

The interest rate you must pay over the course of each month

The annual fee

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.

3.

Which of the following is the largest part of your FICO score?

Amount owed

New credit

Payment history

Types of credit in use

Payment history. Your payment history carries more weight than any other measure.

4.

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.

5.

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.

It prevents you from using too much credit.

There is no point in using a credit card to buy things 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.

6.

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.

7.

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.

Test your knowledge

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