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FINANCIAL LITERACY: QUIZ 3
1. What is the key difference between a credit card and a debit card?
a. Credit cards allow you to borrow money to pay for things, while debit cards take money straight
from your own checking account
b. Wealthy people use credit cards, while people with lower incomes use debit cards
c. Credit cards come from credit unions, while debit cards come from banks
d. You can only use credit cards if you are over 25, but you can use debit cards as long as you are
over 18
2. Craig isn't sure if he should open up a credit card account or get a bank loan. What question is MOST
useful in helping him decide which financial product he should get?
a.
b.
c.
d.
Are you responsible with your money?
Are you trying to make a bunch of small purchases over time or one large purchase?
Are you using the money to purchase an item that is a need or a want?
How much money do you have in your bank account?
3. Kevin really wants to buy a new bike because his old one is too small now. He's trying to decide if he
should use his debit card or credit card. What's one reason he should be careful about using credit?
a.
b.
c.
d.
Credit will take the money straight from his checking account, lowering his bank balance
Credit will force him to pay taxes on his bike purchase
Credit will charge him interest every month until he repays his full balance
Credit will force him to buy a cheaper bike than he could with debit
4. Which statement about credit card interest rates is TRUE?
a.
b.
c.
d.
The more money you spend on purchases, the higher your interest rate will be
A high interest rate means you'll pay MORE money total
A high interest rate means you'll pay LESS money total
Most credit cards do not charge any interest rate
5. Which age group tends to have the most credit card debt?
a. Young adults
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b. Middle-aged people
c. Senior citizens
d. Credit card debt is evenly distributed among all age groups
6. What is the best way to avoid going into large debt on your credit card?
a.
b.
c.
d.
Avoid paying the bill every month so your bank account stays high
Pay the minimum monthly payment on time every month
Pay half your balance every month
Pay your full balance every month
Here's a Credit Card Statement. Use it to answer the next three questions.
7. Using this portion of a credit card statement, how much did the credit card owner pay toward their bill
last month?
a.
b.
c.
d.
$167.49
$267.49
$400
$2,425
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8. According to this portion of a credit card statement, how much did the cardholder pay in total interest
this billing cycle?
a.
b.
c.
d.
$1.60
$31.50
$33.10
$2,458.10
9. What is the minimum amount this cardholder must pay on this month's statement?
a.
b.
c.
d.
$167.49
$400
$2,590.61
You can't tell from this portion of the statement
10. Each of the following factors impacts your credit score EXCEPT...
a.
b.
c.
d.
Payment history
Bank account balance
Mix of credit types
Length of credit history
11. Katherine has been using her credit card very responsibly in hopes of raising her credit score. Which
score would indicate that Katherine now has a prime score?
a.
b.
c.
d.
350
550
750
950
12. Miguel's parents keep telling him he should worry about his credit score. He says, "Why bother?" Why
should Miguel care?
a. A high credit score will make it easier for him to get loans or credit cards with better interest
rates
b. A low credit score will make it easier for him to get loans or credit cards with better interest
rates
c. If his credit score is positive, lenders will allow him to pay back only a portion of his loan instead
of the whole balance
d. Miguel will not be able to apply for colleges if he doesn't have a strong credit score
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13. When discussing a loan, such as a college loan or auto loan, what does the word "principal" mean?
a.
b.
c.
d.
The total amount you borrowed
The amount of interest you pay over the whole length of the loan
The total amount of money you owe
The total number of months you will have to repay the loan
14. What is considered a low credit score?
a.
b.
c.
d.
350 - 500
501 - 720
720-800
None of the above
15. True or False: A credit card is an example of an unsecured loan.
a. True
b. False
Part 2: Extra Credit
1. What is a bad credit score range (low)? What is a good credit score range (prime)?
2. What is the biggest factor in your credit score?
3. What animal was used in the credit score video we watched? What was it’s name?
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