Foolproof Financial Literacy Quiz

20 Questions
Financial Literacy Quizzes & Trivia

When it comes to credit, ignorance can be expensive! Take this quick test to see how financially literate you are.

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Questions and Answers
  • 1. 
    Matt and Eric are young men. Each has a good credit history. They work at the same company and make approximately the same salary. Matt has borrowed $6,000 to take a foreign vacation. Eric has borrowed $6,000 to buy a car. Who is likely to pay the lowest finance charge?
    • A. 

      Matt will pay less because people who travel overseas are better risks.

    • B. 

      They will both pay the same because they have almost identical financial backgrounds.

    • C. 

      Eric will pay less because the car is collateral for the loan.

    • D. 

      They will both pay the same because the rate is set by law.

  • 2. 
    Which of the following instruments is NOT typically associated with spending?
    • A. 

      Cash

    • B. 

      Credit Card

    • C. 

      Debit Card

    • D. 

      Certificate of Deposit

  • 3. 
    • A. 

      Vera, who always pays off her credit card bill in full shortly after she receives it.

    • B. 

      Jessica, who only pays the minimum amount each month.

    • C. 

      Megan, who pays at least the minimum amount each month and more, when she has the money.

    • D. 

      Erin, who generally pays off her credit card in full but occasionally, will pay the minimum when she is short of cash.

  • 4. 
    Which of the following statements is true?
    • A. 

      Your bad loan payment record with one bank will not be considered if you apply to another bank for a loan.

    • B. 

      If you missed a payment more than 2 years ago, it cannot be considered in a loan decision.

    • C. 

      Banks and other lenders share the credit history of their borrowers with each other and are likely to know of any loan payments that you have missed.

    • D. 

      People have so many loans it is very unlikely that one bank will know your history with another bank.

  • 5. 
    • A. 

      Sales tax may be charged on the interest that you earn.

    • B. 

      You cannot earn interest until you pass your 18th birthday.

    • C. 

      Earnings from savings accounts interest may not be taxed.

    • D. 

      Income tax may be charged on the interest if your income is high enough.

  • 6. 
    • A. 

      When some clothes you like go on sale.

    • B. 

      When the interest on the loan is greater than the interest you get on your savings.

    • C. 

      When you need to buy a car to get a much better paying job.

    • D. 

      When you really need a week vacation.

  • 7. 
    • A. 

      All credit records are the property of the U.S. Government and access is only available to the FBI and Lenders.

    • B. 

      You can only check your record for free if you are turned down for credit based on a credit record.

    • C. 

      Your credit record can be checked once a year for free.

    • D. 

      You cannot see your credit record.

  • 8. 
    • A. 

      Nothing

    • B. 

      $50

    • C. 

      $500

    • D. 

      $1,000

  • 9. 
    Mike and Dave work together in the finance department of the same company and earn the same pay. Mike spends his free time taking work-related classes to improve his computer skills; while Dave spends his free time socializing with friends and working out at a fitness center. After five years, what is likely to be true?
    • A. 

      Mike will make more money because he is more valuable to his company.

    • B. 

      Mike and Dave will continue to make the same amount of money.

    • C. 

      Dave will make more because he is more social.

    • D. 

      Dave will make more because Mike is likely to be laid off.

  • 10. 
    Which of the following statements is NOT correct about most ATM (Automated Teller Machine) cards?
    • A. 

      You can get cash anywhere in the world for no fee.

    • B. 

      You must have a bank account to have an ATM Card.

    • C. 

      You can generally withdraw cash 24 hours a day.

    • D. 

      You can generally obtain information concerning your bank balance at an ATM machine.

  • 11. 
    • A. 

      It will make Barbara’s parents pledge their home to repay Barbara's credit card debt.

    • B. 

      It will require Barbara to have both parents co-sign for the card.

    • C. 

      It will charge Barbara twice the finance charge rate it charges older cardholders.

    • D. 

      It will start Barbara out with a small line of credit to see how she handles the account.

  • 12. 
    When are you entitled to receive a free credit report?
    • A. 

      Never, it is proprietary information of the credit bureaus.

    • B. 

      Only when you pay a $39 fee each time.

    • C. 

      Only when you have been denied credit.

    • D. 

      Once a year for free.

  • 13. 
    Which type of financial institution is member owned and generally has the lowest overhead with the best interest rates?
    • A. 

      Local Bank

    • B. 

      National Bank

    • C. 

      Credit Union

    • D. 

      Savings and Loan Institution

  • 14. 
    Negative financial information (excluding bankruptcy) can stay on your credit report for:
    • A. 

      2 years

    • B. 

      5 years

    • C. 

      7 years

    • D. 

      10 years

  • 15. 
    In terms of credit, what does APR stand for?
    • A. 

      Annual Percentage Rate

    • B. 

      Annual Penalty Rate

    • C. 

      Annual Payment Rate

    • D. 

      Annual Payoff Rate

  • 16. 
    How many days does a creditor have to acknowledge your written complaint about a billing error?
    • A. 

      30 days

    • B. 

      60 days

    • C. 

      90 days

    • D. 

      120 days

  • 17. 
    A credit card can increase your interest rate when:
    • A. 

      Your payment is late.

    • B. 

      You go over your credit limit.

    • C. 

      They merge with another company.

    • D. 

      All of the above.

  • 18. 
    If you buy a computer for $2,000 on your credit card (at 24% APR) and makes minimum payments of $60 each month, how long will it take you to pay off the computer?
    • A. 

      33 months (2.7 years)

    • B. 

      Just under 5 years

    • C. 

      7 years 3 months

    • D. 

      13 years and 1 month

  • 19. 
    When you are charged an “over-the-limit” fee on your credit card, which of the following would happen?
    • A. 

      You will be charged a fee every month until you reduce your balance to under the credit card limit.

    • B. 

      You will be charged a one-time fee and your credit card will be suspended.

    • C. 

      You will be charged a one-time fee and your interest rate will be raised to the highest level.

    • D. 

      You will be charged a one-time fee and your credit card limit will be raised.

  • 20. 
    How does a debit card differ from a credit card?
    • A. 

      There is no dispute resolution with a debit card under federal law.

    • B. 

      A debit card does not usually appear on your credit report.

    • C. 

      You may be responsible for the total amount of all unauthorized transactions on your debit card.

    • D. 

      All of the above.