Quiz Questions on Credit Management and Awareness

The average APR for a payday loan is closest to.

1. 40%
2. 14%
3. 400%
4. 4%

The Answer is 400%

The average APR for a payday loan is closest to 400%, reflecting the typically high interest rates ranging from 200% to 600%, with an average around 400%, resulting in substantial total repayment amounts, such as paying back $400 for a $100 loan.

Why Would a Borrower Get a Cosigner for a Loan?

A borrower may secure a cosigner for a loan to obtain approval or better terms, as the cosigner agrees to be accountable for the debt, enhancing the borrower's creditworthiness, but risking their own credit if the borrower defaults.

Why is It Important to Consider the Annual Fee and APR of Credit Card Offers When Selecting a Credit Card?

Considering the annual fee and APR of credit card offers is crucial as the annual fee represents the cost for card usage each year, while the APR signifies the interest rate on outstanding balances, impacting the overall cost and financial implications of the credit card.

When You Sign Up for Phone, Tv, or Internet Service, the Provider is Likely to Check Your Credit Report. Why Would They Do This Even Though You’re Not Borrowing Money From Them?

Providers check your credit report when signing up for services like phone, TV, or internet to assess your creditworthiness, as it helps them determine if you're likely to pay bills on time, and may require a deposit or set terms based on your credit history, even though you're not directly borrowing money from them.

If You Review Your Credit Report and Find an Error, and You’re Able to Prove It is Indeed an Error, How Long Does the Credit Bureau Have to Remove the Error?

If you review your credit report, find an error, and can prove it, the credit bureau must remove the error within 30 days, as mandated by the Fair Credit Reporting Act (FCRA), ensuring accuracy and completeness of credit information.

In General, Why Do So Many Different Types of Companies Check Your Credit Report?

Various companies check your credit report to assess your creditworthiness, safeguard their credit score, and determine pricing for their products or services, ensuring informed business decisions and risk management.

Josephine Decided to Get This Platinum Card Since She Saw the Ads Touting the 0% Apr Platinum. Sign Up Now. After Reading This Agreement, Which of the Following Statements is True?

a. Her A.P.R will change after six months and be between 15.24% to 23.24% assuming that she has been making on-time payments during those first six months.

b. She will not pay interest on any of the purchases she makes on this credit card for the first year.

c. All her purchases on this credit card are FREE for the first six months.

d. All her purchases on this card are FREE.

After reading the agreement, it is true that Josephine, with the Platinum card featuring a 0% APR, won't have to pay any interest for the first year, making Option B ("No Interest for 1st Year") correct.