CreditCards.com Visa credit cardsMasterCard credit cardsAmerican Express credit cardsDiscover credit cards

Thursday, August 21st 2014

Dude: Think you can handle a credit card?

So, kid, you want to become independent? Good!

You want to get a job? Good!

You want to move out on your own? Good!

You want to get a credit card? Hang on there, pal.

Now you're talking about something serious. Yes, you need to build a credit history. But what level of responsibility is best? Credit card? Debit card? Quality time with a PS2? Before you fill out that credit application, take this quiz to get a feel for what you need to know. Each correct answer is worth one point:

Good luck, dude!

1. If you lose your card and someone makes unauthorized charges on it, how much are you liable for?

All charges.
A maximum of $50 per card.
Nothing if you report the loss within 90 days.
Nothing if the unauthorized charges don’t exceed $500.

2. The Credit CARD Act of 2009, most of which goes into effect in February 2010, changes a few things regarding young adults who want a credit card account in their own names. Here are several statements. One or more is false; pick all that apply. Which statement or statements is NOT one of the new rules?

Card issuers cannot raise the credit limit for accounts held jointly with people under 21 without permission from the parent, guardian or spouse.
Users under 21 will need a parent or guardian to co-sign unless they can show proof of income or ability to repay credit.
Grace periods will be extended for users under 21.
Colleges and universities will have to report if they sign marketing agreements with credit card issuers.

3. True or False? Most experts recommend paying the minimum payment amount listed on your statement each month.

True.
False.

4. What is an APR?

A flat fee charged once a year (annum) to use the card.
The true interest rate you pay over the course of a year when you have an outstanding balance.
Absolutely Perfect Rate.

5. Which is NOT a factor in determining your credit score?

Marital status.
Payment history.
Length of credit history.
Types of credit you have.

6. What can be affected by a low credit score? There may be more than one; check the best answer or answers.

a) Ability to get a student loan.
b) Ability to get a job.
c) Ability to get a cell phone.
d) Ability to get an apartment.
e) All of the above.
f) None of the above.
g) a, b and c only.

7. Which of these will likely NOT boost your credit score?

Paying bills on time.
Opening several accounts at once.
Paying down your balance.
Having a mix of types of credit.

8. Say you have a balance of $3,000 and you want to make minimum monthly payments of 3 percent of your total (and an absolute minimum of $25 per month) with an APR of 17 percent. How long would you guess it will take you to pay off the balance if you don’t charge another dime?

5.5 years.
10.5 years.
15 years.
20 years.

9. If your parents make you an authorized user on their account, who’s liable if you can’t make the payments on what you’ve charged?

You are.
Your parents.
No one if you're under 21.

10. What is a credit card's security code?

A three- or four-digit code printed on the card.
Another name for your Social Security number.
A 4-digit password you register when you activate the card.
An answer to a question used to identify you as the cardholder.

 
USA   |   UK   |   Australia   |   Canada