Credit Card Basics
What is the only way a cardholder can avoid paying interest on a credit card?
What is paying the balance in full every month?
Name one of the three companies that tracks all of your credit information.
What is Equifax, Experian, or TransUnion?
What is the single best way for someone with a low credit score to improve it?
What is making on-time payments?
What is the term used for lenders who "prey" on low-income borrowers with little to no other options for obtaining a loan?
What is predatory lending?
On a credit card statement, the cardholder's New Balance is $523.20 and the FINANCE CHARGE is $0.00. What is the minimum amount the cardholder must pay to avoid paying any interest for the previous period?
What is $523.20 (the full new balance)?
This type of credit card requires a security deposit equal to the credit limit and is good for people establishing a credit history.
What is a secured credit card?
This is the government-run website that allows you to download your credit report for free on an annual basis.
What is Annualcreditreport.com?
What factor is NOT included when calculating an individual's credit score?
Salary, payment history, amounts owed, length of credit history.
What is the consumer's salary?
If the term length of a loan is shorter, your monthly payments will be this, and the total interest you will pay will be this.
What is higher and lower?
What is the maximum liability the owner of a lost or stolen credit card faces if the card was used illegally before the credit card company was notified?
What is $50.00?
Which is true: with a debit card you spend your own money, or with a credit card you spend your own money?
What is: With debit cards, you're spending your own money at point of sale, while with credit cards, you're promising to pay back the money eventually?
Besides the annual check, name one other circumstance when you may view your credit report for free.
What is: If you have been denied credit within the last 60 days?
Name one of the two most important factors in calculating your credit score.
What is Payment History or Amounts Owed?
When paying extra on an amortized loan, the extra payment is applied to this part of the loan, which pays down your debt more quickly.
What is the principal amount you owe?
If a credit card shows a range of APRs (e.g., 9.99% - 23.99%), what determines where your specific APR will fall?
What is the strength of your credit history?
What happens to the final amount paid when you only pay the minimum payment on a credit card every month?
What is: The final amount paid will be substantially higher than the amount initially charged to the card?
If you find an error on your credit report, who should you contact FIRST to have it fixed?
What is the credit reporting agency (Equifax, Experian, or TransUnion)?
Give an example of an activity that could have a negative impact on your credit score.
What is applying for multiple credit cards in a short period of time (e.g., a week)?
Consumers use payday loans primarily because they need this, which is not provided by other financial institutions.
What is quick access to money?
Which statement best explains why paying extra on an amortized loan is beneficial?
What is: The extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly? 2222
Name one good strategy for building credit that does NOT involve opening a checking account and using a debit card.
What is: Open a credit card with a cosigner, become an authorized user, or open and use a secured credit card?
For how long will a negative payment (like a forgotten bill) show up on your credit report?
What is seven years?
Your credit score can determine whether you are approved for a loan and also what this is.
What is the interest rate on that loan?
How does a low credit score financially affect the interest rate of loans you receive?
What is: The interest rate of loans will be higher?
On a credit report's payment history, an orange/red box marked with a "30" in a specific month indicates what happened with that month's payment?
What is: The borrower was 30 days late on their payment?