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ARE YOU CREDIT CARD SAVVY?  A SHORT QUIZ...


1. If you carry a balance on your credit card, interest starts running on any new purchases:

a) On the date your new bill is produced
b) On the date your bill is due (after the grace period)
c) On the date of the new purchase
d) On the first business day of the month following the date of your purchase


2. If you obtain a credit card with a low introductory rate on balance transfers, which is generally not true?

a) You will be charged a fee when you transfer higher rate balances to this card
b) Your rate will increase dramatically if you are late with a payment during the introductory period
c) The rate on new charges will be at the introductory rate for the introductory period
d). Your rate will increase dramatically after the introductory period is over


3. Which of the following is the most likely to decrease your FICO score?

a) Checking your credit score 3 times in a month
b) Closing a credit card that you have used for more than a year
c) Piggybacking on a parent’s account
d) Refusing a credit card offered by a national lender


4. What is the meaning of “usury:”

a) Restrictions on the marketing of credit cards to high school students
b) Restrictions on the use one can make of a credit or debit card
c) Restrictions on the interest rate borrowers can be charged
d) Restrictions on the number of credit cards issued to one person


5. In paying down credit card debt on several cards, most experts recommend:

a) Paying down the card with the highest interest rate
b) Paying down the card with the highest credit limit
c) Paying down the card with the lowest amount of debt
d) Paying down the card you have held for the longest period of time


6. If you are not good at keeping a running total of your balance on a debit card, what is a common recommendation to lower card fees?

a) Use several debit cards instead of just one
b) Switch to a credit card
c) Opt out of overdraft protection and ask for e-mail notification
d) Use an ATM to acquire cash whenever you will be shopping


7. What is the most a credit card holder is liable for when there is fraudulent use of his card?

a) $0
b) No limit unless reported within 48 hours of notice
c) $100
d) $50


8. Which best describes how (legitimate) credit card debt management plans work?

a) The debt management company plays one card company against another
b) The debt management company receives a flat fee from the card companies when full payment is received from the card holder
c) The debt management company advances money to pay card debt and the card holder pays it back over an extended period
d) The debt management company negotiates payment schedules, gets one check from the card holder and pays the card companies


9. Which best describes the role of Master Card and Visa in the credit card world?

a) Master Card and Visa issue cards and share profits with the banks that use their brand marketing and advertising
b) Master Card and Visa do not issue cards but their income is tied to the usage of cards with their brand
c) Master Card and Visa are responsible for collecting credit card debt when a cardholder defaults
d) Master Card and Visa are paid an annual fee by the merchants who sell products or services to card holders using their brands


10. When a credit card application indicates a fixed rate, which of the following is true?

a) That rate is not tied to a floating rate (e.g. prime rate) but can be still be increased
b) That rate can only be increased if the card holder pays late or goes over its credit limit
c) That rate is fixed for as long as the card holder uses the card and pays on time
d) That rate is fixed for at least one year


11. Which of the following is not considered in calculating your FICO score?

a) Income history
b) Longevity of credit relationships
c) Total debt available to you
d) Number of credit applications within a defined period


12. Which of the following statements about credit reports is correct?
a) They must remove any black mark (ding) which you contest
b) They are accurate 99% of the time
c) They must be provided to you free of charge at least once per year
d) They are owned by the credit card companies


13. Why is making only the minimum required monthly payment on your credit card bill worrisome?

a) You are increasing the likelihood that your card holder will cancel your card
b) The credit reporting companies will lower your FICO score
c) You are not reducing your debt in any significant way
d) You are reducing your ultimate borrower power


14. Credit Cards are a loan:

a) True
b) False


15. What is the current state of the credit card world?

a) The card companies are raising minimum monthly payments
b) The card companies are making it harder on existing card holders
c) Some card companies are providing incentives for card holders to pay off debt and cancel their cards
d) All



Click here to see the answers

 
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