JA Financial Literacy: Theme Three

1. Which of the following do NOT involve interest payments on purchases?

• Personal loans
• Credit cards
• Debit cards
• Title loans

2. Which of the following is a disadvantage of using a credit card?

• The convenience of purchasing now
• The ability to purchase expensive items
• It is widely accepted for payment
• It is subject to interest and fees

3. Which of the following has a maximum credit limit that can be used for multiple purchases and can be paid back over time?

• Title loans
• Credit cards
• Mortgage
• Paycheck loan

4. Which of the following is NOT an example of an installment loan?

• Mortgage
• Auto loan
• Debit cards
• Student loan

5. What is the best way to improve a bad credit history?

• Apply for additional credit cards
• Pay off the lowest interest rate cards first
• Use credit cards instead of paying with cash
• Pay more than the monthly minimum payment

6. Which of the following have the highest interest rates?

• Payday loans
• Personal loans
• Credit cards
• Student loans

7. What affects an individual's credit history?

• Their decisions about loaning others money
• Their major financial transactions, such as car purchases and rent payments
• Their important achievements, such as graduating from college and having children
• Their ability to save money for retirement

8. How can a credit report help you identify suspicious activity related to your finances?

• A credit report will name identity thieves who have targeted you.
• A credit report will show fraudulent credit accounts opened in your name.
• A credit report will indicate how you accidentally shared your private information.
• A credit report will reverse unwanted or illegal charges made by others.

9. Alaina, a 22-year-old college graduate, wants to increase her credit score so that she can get a better interest rate for a loan. At 18, she opened her first credit card. The month she graduated from college, she opened three new credit cards, and made minimum payments on her first monthly statements. Which of these steps that Alaina took negatively impacted her credit score the MOST?

• She opened a lot of accounts in a short amount of time.
• She opened her first credit card at 18.
• She only made minimum payments on the new cards.
• She graduated college.

10. What is the highest possible credit score?

• 425
• 675
• 850
• 1000