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Personal Finance Courses: Credit

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1.
Credit is free money.
Choose wisely. There is only one correct answer.
False. Credit is a loan of money, meaning you must pay it back with interest after using it. It is not free money.
2.
Shopping for a good credit card deal is easy because there are only a few large organizations that offer credit cards.
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False. There are thousands of banks, credit unions, and other organizations that offer credit cards.
3.
If you are wealthy and don't need to take out any loans, it is still a good idea to have good credit.
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True. You don't know for sure that you will still have your money in the future.
4.
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.
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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.
5.
Which of the following is the largest part of your FICO score?
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Payment history. Your payment history carries more weight than any other measure.
6.
If the annual percentage rate on your credit card is 18%, you will pay 18% interest on each month's balance.
Choose wisely. There is only one correct answer.
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%.
7.
What is the main reason behind using a credit card to buy things that you already have cash for?
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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.