Your 1st Credit Card

Approved & Edited by ProProfs Editorial Team

The editorial team at ProProfs Quizzes consists of a select group of subject experts, trivia writers, and quiz masters who have authored over 10,000 quizzes taken by more than 100 million users. This team includes our in-house seasoned quiz moderators and subject matter experts. Our editorial experts, spread across the world, are rigorously trained using our comprehensive guidelines to ensure that you receive the highest quality quizzes.

Learn about Our Editorial Process

| By Firstnoel12

Firstnoel12

Community Contributor

Quizzes Created: 5 | Total Attempts: 18,855

Questions: 10 | Attempts: 127 | Updated: Apr 10, 2024

Questions

Settings

Create your own Quiz

Share on Facebook Share on Twitter Share on Whatsapp Share on Pinterest Share on Email Copy to Clipboard Embed on your website

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.

Rate this question:
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.

Rate this question:
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.

Rate this question:
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.

Rate this question:
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.

Rate this question:
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.

Rate this question:
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.

Rate this question:
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.

Rate this question:
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.

Rate this question:
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!

Rate this question:

Quiz Review Timeline +

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

Your 1st Credit Card

Relating to credit, APR stands for:

With a secured credit card:

The bonus of getting 5% cash back:

An annual fee for a credit card:

Zero percent on a balance transfer means:

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

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

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

Using a credit card will affect my credit score.

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