Convenient, fast, and handy, it’s no wonder that 75% of Americans have at least one credit card to their name. Besides being convenient, credit cards can boost your credit score, increase your chance of securing a loan, and lock it in at a lower interest rate if you’ve got a boast-able number. If they’re so valuable, what do you actually know about this powerful little tool? Brush up your credit card knowledge with a quick quiz below (answers at the bottom):
1. Let’s begin. What exactly IS a credit card?
a. An instant bank loan you agree to pay.
b. Technology that lets consumers draw money straight from their checking accounts to pay for purchases.
c. The bane of your existence.
2. What does “APR” stand for?
a. Accelerated percentage rate.
b. Annual percentage rate.
c. Anticipated performance rate.
d. Average projection rate.
3. True or False: You’ll never pay interest if you pay your credit card bill in full and on time.
c. True – unless you use convenience checks or get cash advances.
4. Can your interest rate change at any time and for any reason?
a. Yes, but only after going through the Federal Reserve Board for permission
b. Yes, after giving consumers 15 days’ notice.
c. No. The issuer is bound by the terms of the contract, just like the consumer.
d. No, thanks to the landmark 1987 Supreme Court ruling in
5. Canceling a credit card does what to your credit score?
a. Increases it.
b. Decreases it.
c. Has no impact.
6. The interest rate on a variable rate credit card is based on what components?
a. Your average daily balance multiplied by the prime rate.
b. The collateral, the principal, and the late fee.
c. The prime rate, plus the federal funds rate.
d. The prime rate, plus a margin.
7. Which does NOT affect your credit score?
a. Payment history.
b. Amount owed.
c. Length of time you’ve had credit.
d. How much new credit you have.
e. The mix of credit types.
f. Whether you own versus rent your home.
8. Credit card finance charges can go as high as:
a. 3 percent
b. 13 percent
c. 23 percent
9. Every card has it: what does PIN stand for?
a. Personal Identification Number
b. Prior Investment Number
c. Provider Identification Number
1(a), 2(b), 3(c), 4(b), 5(b), 6(d), 7(f), 8(c), 9(a)
How’d you do? If you landed a 6/9 or below, it may be helpful to get in touch with one Titonka Savings Bank’s expert, who’ll help you make the most of your credit card habits. We’d love to hear from you!