National Credit Education Week

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National Credit Education Week

• Take the Credit Challenge!

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National Credit Education Week
Our credit system is truly remarkable.
Provides opportunity, improves standard of living
Homeownership, entrepreneurship, higher education
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But if credit is misunderstood,
Can become a burden instead of a dream come true
The more you know, the more likely your success
in using credit
National Credit Education Week
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How much do you know about credit?
Take the Credit Challenge, and find out!
National Credit Education Week
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1. What is the single most importantway to
maintain a positive credit history?

• a.) avoid cosigning loans for others
• b.) pay your bills on time
• c.) avoid exceeding your credit limit on
• revolving accounts
• d.) transfer credit balances often to take
• advantage of low introductory rates

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1. What is the single most important way to
maintain a positive credit history?

• a.) avoid cosigning loans for others
• b.) pay your bills on time
• c.) avoid exceeding your credit limit on
• revolving accounts
• d.) transfer credit balances often to take
• advantage of low introductory rates

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2. Which of the following is an example of a
revolving account?

• a.) auto loan
• b.) mortgage
• c.) charge card
• d.) credit card

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2. Which of the following is an example of a
revolving account?

• a.) auto loan
• b.) mortgage
• c.) charge card
• d.) credit card

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3. Your credit history can have an impact on
which of the following?

• a.) your application for a credit card
• b.) the rates you pay for auto and home
• insurance
• c.) your job application with a prospective
• employer
• d.) all of the above
• e.) none of the above

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3. Your credit history can have an impact on
which of the following?

• a.) your application for a credit card
• b.) the rates you pay for auto and home
• insurance
• c.) your job application with a prospective
• employer
• d.) all of the above
• e.) none of the above

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4. Which of the following balance calculation
methods used by credit card companies results in
the most expensive credit terms (assuming the
interest rates are equal), and is the one you
should avoid when evaluating credit offers?

• a.) two-cycle average daily balance, including
  new
• purchases
• b.) average daily balance, excluding new
  purchases
• c.) two-cycle average daily balance, excluding
  new
• purchases
• d.) average daily balance, including new purchases

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4. Which of the following balance calculation
methods used by credit card companies results in
the most expensive credit terms (assuming the
interest rates are equal), and is the one you
should avoid when evaluating credit offers?

• a.) two-cycle average daily balance, including
  new
• purchases
• b.) average daily balance, excluding new
  purchases
• c.) two-cycle average daily balance, excluding
  new
• purchases
• d.) average daily balance, including new purchases

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5. Besides the annual percentage rate, what is
the most important factor to consider when
choosing between several credit card offers?

• a.) length of the grace period
• b.) the balance calculation method
• c.) the annual fee
• d.) the fee for late payment

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5. Besides the annual percentage rate, what is
the most important factor to consider when
choosing between several credit card offers?

• a.) length of the grace period
• b.) the balance calculation method
• c.) the annual fee
• d.) the fee for late payment

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6. Your credit card is stolen and the thief runs
up a total of 1,000. You notify the issuer of
the card as soon as you discover it is missing.
What is the maximum amount that you can be
obligated to pay according to federal law?

• a.) none
• b.) 50
• c.) 1,000
• d.) 500

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6. Your credit card is stolen and the thief runs
up a total of 1,000. You notify the issuer of
the card as soon as you discover it is missing.
What is the maximum amount that you can be
obligated to pay according to federal law?

• a.) none
• b.) 50
• c.) 1,000
• d.) 500

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7. Which of the following debts can be discharged
(wiped out) when you file for bankruptcy?

• a.) child support
• b.) student loans
• c.) taxes owed to the IRS
• d.) all of the above
• e.) none of the above

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7. Which of the following debts can be discharged
(wiped out) when you file for bankruptcy?

• a.) child support
• b.) student loans
• c.) taxes owed to the IRS
• d.) all of the above
• e.) none of the above

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8. Which of the following costs are expressed in
a credit offers annual percentage rate?

• a.) annual fees, acceptance fees and interest
• b.) annual fees, late fees, over-limit fees and
  interest
• c.) annual fees, credit-loss protection insurance
  and interest
• d.) interest

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8. Which of the following costs are expressed in
a credit offers annual percentage rate?

• a.) annual fees, acceptance fees and interest
• b.) annual fees, late fees, over-limit fees and
  interest
• c.) annual fees, credit-loss protection insurance
  and interest
• d.) interest

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9. Saul must borrow 10,000 to complete his
college education. Which of the following would
NOT be likely to reduce the finance charge rate?

• a.) if the loan was insured by the federal
  government
• b.) if his parents cosigned the loan
• c.) if he went to a state college rather than a
  private
• college
• d.) if his parents took out an additional
  mortgage on
• their house for the loan

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9. Saul must borrow 10,000 to complete his
college education. Which of the following would
NOT be likely to reduce the finance charge rate?

• a.) if the loan was insured by the federal
  government
• b.) if his parents cosigned the loan
• c.) if he went to a state college rather than a
  private
• college
• d.) if his parents took out an additional
  mortgage on
• their house for the loan

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10. Which of the following statements best
describes your right to check your credit history
for accuracy?

• a.) your credit record can be checked at any time
  for free
• b.) if you are turned down for credit based on
  information the creditor obtained in a credit
  report, the report can be checked for free
• c.) most people will have to pay to receive a
  single copy of their credit record each year, but
  the fees are low and cannot exceed the maximum
  amount set by law
• d.) access to credit records is reserved for
  lenders and government agencies, individuals
  cannot see their credit records

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10. Which of the following statements best
describes your right to check your credit history
for accuracy?

• a.) your credit record can be checked at any time
  for free
• b.) if you are turned down for credit based on
  information the creditor obtained in a credit
  report, the report can be checked for free
• c.) most people will have to pay to receive a
  single copy of their credit record each year, but
  the fees are low and cannot exceed the maximum
  amount set by law
• d.) access to credit records is reserved for
  lenders and government agencies, individuals
  cannot see their credit records

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11. Which of the following statements is true?

• a.) if you missed a payment more than five years
• ago, it cannot be considered in a loan
  decision
• b.) people have so many loans it is unlikely that
  one
• bank will know your history with another
  bank
• c.) banks and other lenders share the credit
  history
• of their borrowers with each other and are
  likely
• to know of any loan payments you have missed
• d.) your bad loan payment record with one bank
• will not be considered if you apply to
  another
• bank for a loan

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11. Which of the following statements is true?

• a.) if you missed a payment more than five years
• ago, it cannot be considered in a loan
  decision
• b.) people have so many loans it is unlikely that
  one
• bank will know your history with another
  bank
• c.) banks and other lenders share the credit
  history
• of their borrowers with each other and are
  likely
• to know of any loan payments you have missed
• d.) your bad loan payment record with one bank
• will not be considered if you apply to
  another
• bank for a loan

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12. Which of the following is a way to establish
credit history if you currently have none?

• a.) open a savings account with a
  federally-insured
• financial institution
• b.) do business with a rent-to-own store
• c.) open an account in your name with a local
• utility company
• d.) apply for government assistance programs
• e.) borrow and repay a series of small, personal
• loans from a check-cashing or payday lender

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12. Which of the following is a way to establish
credit history if you currently have none?

• a.) open a savings account with a
  federally-insured
• financial institution
• b.) do business with a rent-to-own store
• c.) open an account in your name with a local
• utility company
• d.) apply for government assistance programs
• e.) borrow and repay a series of small, personal
• loans from a check-cashing or payday lender

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13. Debbie has agreed to cosign a loan with her
son so that he can be approved for an auto loan
from the bank. Which of the following is a risk
Debbie is taking as a cosigner?

• a.) Debbie will have to carry an additional
  insurance
• policy in her name on her sons car
• b.) if her son does not repay his loan, Debbies
  own
• car will be taken by the bank
• c.) if her son does not repay his loan, Debbie
  will be responsible for making the payments on
  his car
• d.) as the principal applicant on the loan, only
  her son is responsible for the payments, but
  Debbie may be contacted by the bank if her son
  does not repay the loan

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13. Debbie has agreed to cosign a loan with her
son so that he can be approved for an auto loan
from the bank. Which of the following is a risk
Debbie is taking as a cosigner?

• a.) Debbie will have to carry an additional
  insurance
• policy in her name on her sons car
• b.) if her son does not repay his loan, Debbies
  own
• car will be taken by the bank
• c.) if her son does not repay his loan, Debbie
  will be responsible for making the payments on
  his car
• d.) as the principal applicant on the loan, only
  her son is responsible for the payments, but
  Debbie may be contacted by the bank if her son
  does not repay the loan

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How did you do?
10Way to go! Youre on your way to being a
credit pro. But remember that having the answers
only helps when you also apply them in practice
to your daily life. The whole idea is to develop
sound money habits that will benefit you for
years to come8-9Pretty good, youre familiar
with most of those tricky terms that were thrown
at you. Congratulate yourself and stat encouraged
to keep learning about credit.5-7Not bad. But
before you pat yourself on the back, take another
look at how you use credit. Consider checking
your credit report and reviewing it with someone
you trust on financial matters.4 or
lessLearning about credit is a lifelong process!
Weve only scratched the surface with this
quiztheres so much to know when it comes to
your personal finances. And the more you know,
the more you realize how important credit is to
achieving your financial goals.
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Thank you for participating in National Credit
Education Week
Excerpts reprinted with permission from Jumptart
Coalition for Personal Financial
Literacy Presentation provided by ACA
International