Your 1st Credit Card

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| By Firstnoel12
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Firstnoel12
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Quizzes Created: 5 | Total Attempts: 18,824
Questions: 10 | Attempts: 126

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Your 1st Credit Card - Quiz


Options for your first credit card, weighing the pros and cons.


Questions and Answers
  • 1. 

    Relating to credit, APR stands for:

    • A.

      The month of April.

    • B.

      The annual percentage rate.

    • C.

      The annual per-year rebate.

    • D.

      The adult practice rate.

    Correct Answer
    B. The annual percentage rate.
    Explanation
    APR stands for Annual Percentage Rate, which is a measure of the cost of credit expressed as a yearly interest rate. It includes both the interest rate and any additional fees or charges associated with the loan. The APR allows borrowers to compare the costs of different loans or credit options and make informed decisions. It is an important factor to consider when taking out a loan or using credit, as it gives a more accurate representation of the total cost of borrowing.

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  • 2. 

    With a secured credit card:

    • A.

      The bank charges you $25 per month to have the card.

    • B.

      You must have an authorized user co-sign for your collateral.

    • C.

      You must have a student account to hold as collateral.

    • D.

      You have a savings deposit on hold as collateral.

    Correct Answer
    D. You have a savings deposit on hold as collateral.
    Explanation
    The correct answer is that you have a savings deposit on hold as collateral. This means that in order to obtain a secured credit card, you must have a savings deposit that is held by the bank as collateral. This deposit acts as security for the credit card issuer, ensuring that they have a means to recover any unpaid debts if you fail to make your payments. By having a savings deposit on hold as collateral, you are essentially borrowing against your own money and building credit as you make timely payments on the card.

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  • 3. 

    The bonus of getting 5% cash back:

    • A.

      Means you don't have to pay 5% of your credit card bill each month.

    • B.

      Means you earn 5% cash back on your credit card statement for certain purchases.

    • C.

      Means you get 5% cash back at the end of the year from the credit card company.

    • D.

      Means you will have to pay an annual fee to have the credit card.

    Correct Answer
    B. Means you earn 5% cash back on your credit card statement for certain purchases.
    Explanation
    This answer correctly explains that the bonus of getting 5% cash back means that you earn 5% cash back on your credit card statement for certain purchases. This means that for certain eligible purchases, you will receive a percentage of the purchase amount back as cash rewards on your credit card statement.

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  • 4. 

    An annual fee for a credit card:

    • A.

      Is standard with any type of credit card you apply for.

    • B.

      Is a special fee if you do not use your credit card for one annual year.

    • C.

      Is a fee you pay each year to have the particular credit card.

    • D.

      Is not a fee connected with student accounts.

    Correct Answer
    C. Is a fee you pay each year to have the particular credit card.
    Explanation
    The correct answer is "Is a fee you pay each year to have the particular credit card." This explanation correctly identifies that an annual fee for a credit card is a payment made by the cardholder every year in order to maintain possession of the specific credit card. This fee is separate from any other charges or interest rates associated with using the card.

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  • 5. 

    Zero percent on a balance transfer means:

    • A.

      You do not pay any interest on a credit card balance you transfer from another credit card.

    • B.

      There is not a balance due for that month on your credit card statement.

    • C.

      You will be charged a fee of zero dollars for that particular month of purchases.

    • D.

      You made zero purchases on your credit card for the month.

    Correct Answer
    A. You do not pay any interest on a credit card balance you transfer from another credit card.
    Explanation
    Zero percent on a balance transfer means that you do not have to pay any interest on the credit card balance that you transfer from another credit card. This is a beneficial feature as it allows you to save money on interest charges and potentially pay off your debt faster. It is important to note that this zero percent interest rate is usually for a limited period of time, after which the interest rate may increase.

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  • 6. 

    If you are over 21 years of age, you cannot be an authorized user on your parents' credit card.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    There is no age limit to be an authorized user on another's account.

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  • 7. 

    The HIGHER the APR, the better the credit card value.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    You should weigh the APR wth other rewards offered, but usually the higher the APR is the less of a "deal" the card is.

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  • 8. 

    A secured credit card (check as many answers that are true):

    • A.

      Has a definite credit limit.

    • B.

      Always has an annual fee.

    • C.

      Has a low APR.

    • D.

      Has collateral.

    Correct Answer(s)
    A. Has a definite credit limit.
    D. Has collateral.
    Explanation
    A secured credit card is a type of credit card that requires collateral, typically in the form of a cash deposit, which serves as a credit limit. This means that the cardholder can only spend up to the amount of the deposit. Therefore, the statement "Has a definite credit limit" is true. However, it is not always the case that a secured credit card has an annual fee or a low APR. These factors can vary depending on the specific credit card issuer and their terms and conditions.

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  • 9. 

    Using a credit card will affect my credit score.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Using a credit card and paying it back over time establishes credit history and will help build your credit score if it is paid back responsibly.

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  • 10. 

    Choosing the right credit card is an important decision that can affect your credit for years to come.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Choosing to have or not to have a credit card is a big decision, and choosing the right card for your circumstances is also a big step! Consider all your options!

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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Apr 10, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Feb 07, 2013
    Quiz Created by
    Firstnoel12
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