Financial Literacy Quiz Questions And Answers

2.

I received an e-mail from my bank telling me to click on a link and verify my account information. If I don’t do this, I could have problems with my account.

True
False

Correct Answer

A. False

Explanation

> Beware of misleading e-mails and fraudulent Web sites used to trick you into revealing personal information.
> For example, someone claiming to be your bank may send you an e-mail telling you that you will not be able to use your credit card unless you provide your social security number or your online log-in and password.
> This is called phishing, and is used to obtain personal information for unlawful purposes.

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9

3.

I just got my first credit card, and suddenly I’m getting all kinds of credit card offers in the mail. If I want, I can contact someone to stop sending me this junk mail.

True
False

Correct Answer

A. True

Explanation

> When you apply for a credit card or a loan, the bank or store collects your personal information, such as your address, account balances, payment history, etc.
> Some of this information is made available to other companies, which then use the information to send you solicitations for credit cards and insurance products.
> You can opt out of this sharing by calling (888) 5-OPT-OUT / (888) 567-8688 or online at www.optoutprescreen.com.

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3

4.

I just bought my first car and got a loan to pay for it. Some months, though, I have trouble making my payments. If I default on my loan, only this lender will know about it, and some day, if I need another loan, I’ll still be able to get it from another lender.

True
False

Correct Answer

A. False

Explanation

> When you have a loan or a credit card from a bank or other lender, the lender keeps a record of whether you pay back your loan on time.
> This information is made available, along with information about your other debts, to other lenders or potential lenders.
> Your credit history will affect whether you can get a loan or the interest rate that you will have to pay to get that loan.
> It can also determine if you’re able to rent an apartment or get a job.

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1

5.

I want to know what my credit report says about my credit history, but the information is secret and I can't get a copy because only banks can see my credit report.

True
False

Correct Answer

A. False

Explanation

> Your credit report is available to lenders, employers, landlords, and insurers, as long as they have a “legitimate business need.”
> You can order your credit report, and should do so in order to verify that the information is accurate and to see if anyone else has been using your name or financial information illegally. > Under federal law, you can get a free copy of your credit reports annually. To order free reports, go to www.annualcreditreport.com or call (877) 322-8228

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2

6.

I received a lot of money for my graduation, and I want to go to the mall to buy a new laptop. Even though I have the cash, it might still be better to use my credit card to pay for the laptop.

True
False

Correct Answer

A. True

Explanation

> Using a credit card to make purchases offers several advantages over paying with cash.
> For example, most credit cards offer some form of protection if your card is reported stolen or missing, while cash cannot be replaced if lost or stolen.
> Using a credit card may also give you some form of buyer protection if you purchase an item that is defective.
> If you pay by credit card, you will be charged interest on your credit card balance. On most credit cards, you will not pay interest if you always pay off the entire balance - not just the minimum amount due - by the due date.

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0

7.

If I’m late in paying my credit card bill, I may have to pay a late fee in addition to interest charges, and my interest rate may also increase.

True
False

Correct Answer

A. True

Explanation

> Different credit card companies have different policies about late payments.
> Whenever you apply for a credit card or answer a credit card solicitation, be sure you understand the credit card terms, such as the interest rate, any annual fee, and any late fees.
> The credit card issuer must provide information to you about additional costs if you default, along with other information.

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2

8.

I received an e-mail from a stranger in a foreign country telling me that he has inherited about $15 million from his uncle, but cannot get the money out because of complicated rules. He promises that if I send him $500 to help him, I’ll be guaranteed a percentage of the inheritance. Since the e-mail sender knew my name and e-mail address, I can trust him.

True
False

Correct Answer

A. False

Explanation

> There have been many scams tricking victims into sending money because they expected to receive a large fortune after an initial deposit or “investment.”
> Names and e-mail addresses are easily available from mass mailing lists.
> If a deal sounds “too good to be true,” it probably is a scam.

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7

9.

I received a pre-approved credit offer, but I already have a credit card and don’t want another one. I should shred the offer before I throw it out, because it might contain personal information that could be used for identity theft.

True
False

Correct Answer

A. True

Explanation

> It’s not uncommon for people to go through trash looking for credit or financial information or documents containing your social security number.

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3

Financial Literacy Quiz Questions And Answers

Because I need my social security number for so many things, it’s a good idea to keep my social security card in my wallet so I can show it whenever someone asks for it.

Quiz Preview

I received an e-mail from my bank telling me to click on a link and verify my account information. If I don’t do this, I could have problems with my account.

I just got my first credit card, and suddenly I’m getting all kinds of credit card offers in the mail. If I want, I can contact someone to stop sending me this junk mail.

I just bought my first car and got a loan to pay for it. Some months, though, I have trouble making my payments. If I default on my loan, only this lender will know about it, and some day, if I need another loan, I’ll still be able to get it from another lender.

I want to know what my credit report says about my credit history, but the information is secret and I can't get a copy because only banks can see my credit report.

I received a lot of money for my graduation, and I want to go to the mall to buy a new laptop. Even though I have the cash, it might still be better to use my credit card to pay for the laptop.

If I’m late in paying my credit card bill, I may have to pay a late fee in addition to interest charges, and my interest rate may also increase.

I received a pre-approved credit offer, but I already have a credit card and don’t want another one. I should shred the offer before I throw it out, because it might contain personal information that could be used for identity theft.