Credit and Borrowing

Which of the following best describes a credit card?

• A credit card gives you direct access to your bank account.
• Pre-approved credit which can be used for the purchase of items now and payment of them later
• Credit cards are used as a savings device.
• Investment information is stored on credit cards so people can track their investments.

A year ago, Karen cosigned a car loan for her ex-partner, who was a full-time student at the time. She is now receiving calls from a debt collector, chasing the unpaid debt. How much of the remaining debt could Jane be liable for?

• Karen and her ex-partner are liable for half the debt each
• Karen could be responsible for the entire amount outstanding

Christina is 28 and applied for a personal loan from a bank to pay for a car. Her credit score is low because Christina had a bad credit listing on her credit report. This bad listing was from 3 years ago when she did not pay her credit card bill for a few months while she was studying overseas. Can the bank refuse her loan because of a low credit score?

• Yes
• No

Suki will soon turn 18 and wants to move into her own apartment in a few years. But she is worried that she won’t be able to rent an apartment without any credit history. What can Suki do to start building a good credit history?

• Rent an apartment with a friend who already has signed a lease.
• Continue to use her debit card or cash only.
• Get and use a credit card. Pay off amount due each month in full before the due date.
• Close her checking account to avoid bouncing a check.

4 All of the below are good reasons to use a credit card EXCEPT...

• Proper use can help establish good credit rating.
• Often required to hold a reservation for hotel and car rental
• High interest rates on credit cards make it an expensive way to borrow money to buy something now and pay for it later.
• Useful to keep a record of purchases for use in managing a budget.

Credit experts recommend that you check the status of your credit reports at least

• every time you apply for a loan or credit card
• once a year
• once every five years

Which of the following can directly impact your credit score?

• Getting bonus pay from your employer
• Living with your parents to cut down on monthly expenses
• Paying cash for a used car
• Making a late car loan payment

You can't find your credit card and you think it may have been stolen. What is the first thing should you do?

• Wait at least 90 days to report the card as missing or stolen in case you find the card
• Immediately apply for another card so you can keep charging for things.
• Contact your bank for a replacement
• Call the credit card company as soon as you are aware the card is missing and report it as lost or stolen.

When items are bought on credit and paid for over a long period of time, the cost to the buyer is the same as if the items were bought with cash.

• true
• false

If your payment for your full credit card balance is received by the lender BEFORE the due date, you will NOT owe any interest.

• True
• False