This credit card quiz can show you how prepared you are. Or are not. Handling credit cards responsibly is an important part of good financial health. When you know how to get the best credit card, manage your spending and handle rewards you put yourself in a strong fiscal position.
Answer: c. The Credit Card Act of 2009 did not mandate changes in minimum payments. However, many credit card companies and banks decided to make some changes to minimum payments to ensure that balances were paid off a bit faster. While before this act it was common to have minimum payments of just 1% of the balance, today it is more common to find minimum payments that are 1% or 2% of balance plus interest for the period. Of course, paying more than that is always a smart move.
Answer: a. Credit cards let you buy things that you cannot yet afford, making payments in the future, though this is not one of the best reasons to use them. Of course, credit cards help you to build your credit, which is perhaps the best reason to use credit cards.
Answer: a. Responsible use of credit cards gives you better insurance rates. Your credit score, which is determined in large part by your use of credit cards, also plays a major role in the rates that you are charged for auto insurance and life insurance.
Answer: d. When you choose the right credit card you can enjoy a variety of perhaps unexpected benefits.
Answer: d. A secured credit card is a card that you secure by making a small deposit with the bank who issues the card. They are perfect for people with no credit or bad credit.
HOW ARE YOU DOING on the credit card quiz? Well don’t stop now – keep going!
Answer: c. APR stands for Annual Percentage Rate. This is basically the interest rate that you are charged – how much you will pay to be extended this credit. APR can vary from 0% to 20% and even higher on a credit card. APR is an important factor, especially if you plan to carry a balance.
Answer: b. Some people believe that it is okay to stretch the truth about your income if you really want to get a certain card. But this is illegal. In addition, usually it is not necessary, as credit cards do not require you to have a high income to get their card.
Answer: c. A FICO credit score can range from 300 points to 850 points. If you have a FICO under 660 it is generally considered poor.
Answer: a. The best way to improve your credit is to pay your credit cards, and other bills, on time. FICO puts more emphasis on more recent items, so if you were late a long time ago it will not damage your credit as much as recent late payments would.
Answer: c. While you are only required to pay your minimum payment each month doing so can cost you a fortune and allow your debt to linger for years – even decades. Paying a card off each month is great, but at least pay more than the minimum, paying whatever you can afford.
Building Your Credit
The best credit card quiz is designed just to get you thinking. With proper credit card use you can build your credit history, making it easier for you to make large purchases such as cars and homes in the future. A good credit history will save you money in many ways and it is important to strive for. Consider how well you did on this credit card quiz and read up on areas where you may have been a bit rusty.
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