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Personal Finance Courses: Credit

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

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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.
To check your credit, you should get a credit report from just one of the three credit bureaus.
Choose wisely. There is only one correct answer.
False. You should check the reports from all three credit bureaus, as they may have different information from different creditors.
3.
What is the most effective action you can take against a creditor?
Choose wisely. There is only one correct answer.
Deal with them as soon as possible. The sooner you deal with them, the better the chance of sparing your credit and reducing the costs of a fight.
4.
The higher your credit score is, the _______ the interest rates will be on loans you take out.
Choose wisely. There is only one correct answer.
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.
5.
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%.
6.
Having credit available is necessary for most of us who want to _______.
Choose wisely. There is only one correct answer.
All of the above. For most of us, we need credit to do these things.
7.
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.