How Much You Know About Credit Cards? Trivia Quiz

25 Questions | Total Attempts: 624

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How Much You Know About Credit Cards? Trivia Quiz

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Questions and Answers
  • 1. 
    Which of the following is NOT an example of credit?
    • A. 

      Home mortgage

    • B. 

      Auto loan

    • C. 

      Student loan

    • D. 

      Debit card

  • 2. 
    Which of the following factors should be considered when selecting a college?
    • A. 

      The "net price" of the college/university

    • B. 

      Graduation rates

    • C. 

      Whether college offers the field of study you are interested in

    • D. 

      Quality of the student body based on test scores, GPA and selectivity of admissions

    • E. 

      All of the above

  • 3. 
    In order to qualify for financial aid, prospective college students must file the:  
    • A. 

      Financial Aid Letter

    • B. 

      FAFSA

    • C. 

      Credit Report

    • D. 

      Magna Carta

  • 4. 
    Which of the statements below that are TRUE about 401K plans?  
    • A. 

      It pays to start saving immediately in a 401k plan because of the impact of compounding over a long period of time.

    • B. 

      Company’s will often provide a matching contribution to what an employee contributes to their 401K plan (e.g., if an employee contributes $200, the employer could provide a $100 matching contribution)

    • C. 

      A 401K plan is portable in that it stays with the employee even after they have left their company

    • D. 

      A 401K is a retirement savings plan that an investor makes contributions to through deductions from their payroll at the company they work for.

    • E. 

      All of the above

  • 5. 
    Which of the following strategies will result in you paying the LARGEST amount of interest to the credit card company?
    • A. 

      Paying off your credit card balance each month

    • B. 

      Paying 20% of your credit card balance every month

    • C. 

      Making the minimum payment (2% of your credit card balance) every month

  • 6. 
    If you have a very high credit score (e.g., over 800)  you are more likely to be approved when you apply for credit (like a credit card or auto loan) and will likely have a lower interest rate on your loan than a borrower with a low credit score.  
    • A. 

      True

    • B. 

      False

  • 7. 
    Indicate ALL of the possible consequences of making a late payment on your credit card. 
    • A. 

      Charged a late payment fee (usually around $35).

    • B. 

      Increase in interest rate to the Penalty APR rate, which will be significantly higher.

    • C. 

      Increase in rewards offered to cardholder.

    • D. 

      A credit score may go down as a result of poor payment history.

  • 8. 
    If you plan to pay off your credit card balance on-time EVERY month and will not be carrying credit card debt, which factor will be MOST important to you in selecting a credit card:
    • A. 

      Interest rate.

    • B. 

      Rewards or incentives offered by credit card company.

    • C. 

      Quality of credit card commercials.

    • D. 

      Late payment fees.

  • 9. 
    Bank of America VISA is offering an INTRODUCTORY rate of 0% APR (remember that APR is fancy word for interest rate) and 3% cash back on all purchases.  What are the TWO best questions the savvy consumer should ask when evaluating this program?
    • A. 

      How long will this introductory offer last?

    • B. 

      Can I get two credit cards for my account?

    • C. 

      What will the APR and the cashback rewards be after the introductory period?

    • D. 

      Does Bank of America VISA allow online transactions?

  • 10. 
    Which website provides consumers with FREE credit reports from each of the three credit bureaus on an annual basis?  If you are unsure, do some web research to find the correct answer.  
    • A. 

      Freecreditreports.com

    • B. 

      Freescores.com

    • C. 

      Freecredit.com

    • D. 

      Annualcreditreport.com

  • 11. 
    The two MOST important factors in determining your credit score are:  
    • A. 

      Amounts owed (how much debt do you owe?)

    • B. 

      Length of credit history (how long have you had credit?)

    • C. 

      Types of credit used (what type of loans do you have?)

    • D. 

      Payment history (do you make on-time payments?)

  • 12. 
    What are two ways that investors in stocks make money? Reflect back on the Stock Market Game:
    • A. 

      Dividend and share price appreciation (rise in the stock price)

    • B. 

      Return of principal and coupon.

    • C. 

      Dividend and coupon.

    • D. 

      Coupon and share price appreciation (rise in the stock price).

  • 13. 
    The stock market generates predictable returns of 8-9% per year with little variation on a year to year basis (in other words, when looking at annual returns of an index fund like the S&P500 there is little change on a year to year basis).   
    • A. 

      True

    • B. 

      False

  • 14. 
    Which of the following investments would provide an investor with the most diversification?
    • A. 

      Investing in a single company’s stock.

    • B. 

      Investing in a single company’s bonds.

    • C. 

      Putting your money in a savings account.

    • D. 

      Buying an index fund like the S&P500 Fund.

  • 15. 
    School A has a sticker price of $52,000 and an average net price of $6,000 for families with an income of less than $60,000.  Meanwhile, School B has a sticker price of $22,000 and an average net price of $11,000 for families with an income of less than $60,000.  If your number one factor in selecting a school was cost and your family income was under $60,000, which school would you choose?
    • A. 

      School A

    • B. 

      School B

    • C. 

      They are about the same.

  • 16. 
    School A admits 64% of students who apply while School B admits 7% of students who apply.  Which school is considered more selective in their admissions process?   
    • A. 

      School A

    • B. 

      School B

    • C. 

      About the same

  • 17. 
    You are excited about the opportunity to attend State U after you graduate from Eastside.  You had a relative attend the school, have heard that their graduates get great jobs and also that it is a fun place to go.  Their TV ads brag about all the great careers their students enjoy because of their State U degree.  While researching the school on College Navigator, you discover that the school's net price is $32,000/year, that their graduation rate within 4 years is 20% and that their student loan default rate is over 30%.  What would you do?
    • A. 

      Be sure to apply to State U. Those statistics should make you even more excited about attending.

    • B. 

      Immediately research additional schools as you decide based on the statistics that State U is definitely not the place you want to study after all

    • C. 

      Not sure

  • 18. 
    How can you improve your credit score?
    • A. 

      Borrow more money on each of your credit cards

    • B. 

      Get more credit cards

    • C. 

      Pay all of your bills on-time

    • D. 

      Get a higher paying job

  • 19. 
    Which of these organizations can request a copy of your credit report?  If you are uncertain, do not forget to use web research to find the answer.  
    • A. 

      Lenders you are borrowing money from

    • B. 

      Utility companies

    • C. 

      Employers

    • D. 

      Landlords who you want to rent an apartment from

  • 20. 
    Which of the following is "free money" sources that can help you pay for college that you DO NOT need to repay?  
    • A. 

      Pell Grants

    • B. 

      Cal Grants (for California students who stay in-state)

    • C. 

      Scholarships

    • D. 

      Institutional Grants (grants from the school you attend)

    • E. 

      Student Loans

  • 21. 
    Which statement about student debt below is TRUE?
    • A. 

      Since education is an investment in your future, having a reasonable amount of student loan debt is OK.

    • B. 

      Student loans should be avoided at all costs. If you need to take out student loans to go to college, you should not go.

    • C. 

      Few students (less than 10% of students) need to take out student loans to go to college since college costs are declining.

    • D. 

      You should take out student loans first before you consider the grants that are offered to you.

  • 22. 
    What are the best arguments (PICK TWO) that you can make to convince your parents/guardian to co-sign your application for a credit card before you turn 21?
    • A. 

      Getting a credit card will allow you to begin to establish a credit history and a history of on-time payment which will get you a higher credit score sooner.

    • B. 

      Getting a credit card will get you to spend less since research shows people spend less with credit cards than with cash.

    • C. 

      Credit cards provide better fraud protection than debit cards so I am better off using a credit card instead of my debit card.

    • D. 

      Don't worry if I don't pay the credit card on time as it will not affect your credit score.

  • 23. 
    You invest $1,000 to purchase 20 shares of the GAP at a purchase price of $50 per share.  
    • A month later, GAP pays a dividend of $1 per share to shareholders.  
    • You sell your 20 shares of GAP two months later for $60 per share.  
    How much cash would you have after the sale?  What was your gain from your original investment?
    • A. 

      $1,200 in cash with gain of $200

    • B. 

      $1,220 in cash with gain of $1,000

    • C. 

      $1,200 in cash with gain of $220

    • D. 

      $1,220 in cash with gain of $220

  • 24. 
    Which investor has the largest portfolio?  James, Amani, Evelyn and Clarissa each own the same three stocks:  Bank of America, Nike and McDonalds.  Here are the number of shares they each own:Investor                                                                  BofA                Nike               McDonaldsJames102030Amani201010Clarissa301020Evelyn103020Their current share prices are:Bank of America:  $75 per shareNike:  $25 per shareMcDonald's:  $40Sort the investors from LARGEST portfolio value to smallest value (same calculations you did playing the Stock Market Game).  
    • A. 

      Amani, Clarissa, Evelyn, James

    • B. 

      James, Evelyn, Amani, Clarissa

    • C. 

      Evelyn, Amani, Clarissa, James

    • D. 

      Clarissa, James, Evelyn, Amani

  • 25. 
    When thinking about the relationship between risk and return in an investing context, which statement below is TRUE?
    • A. 

      There is no relationship between risk and return.

    • B. 

      For more risky investments, investors expect lower investment returns. For example, since Stryker was a speculative stock, investors would not expect a high return from it.

    • C. 

      Low risk investments generate high returns. For example, savings accounts which are among the lowest risk investments are expected to generate high returns.

    • D. 

      There is a direct relationship between risk and return. Investors expect to earn higher returns from riskier investments.

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