So let’s test our financial knowledge with a little quiz of our own. It will help determine what you know and what you don’t know so you can take important steps toward realizing your financial potential!
1. A credit report is:
a. A list of your financial assets and liabilities
b. Your monthly credit card statement
c. A history of loan and bill payments
d. Your credit line with your financial institution
2. In terms of credit, what does APR stand for?
a. Annual Percentage Rate
b. Annual Penalty Rate
c. Annual Payment Rate
d. Annual Payoff Rate
3. Who insures your stocks in the stock market?
a. The Federal Deposit Insurance Corporation
b. The Securities and Exchange Commission
c. The U.S. Department of the Treasury
d. No one
4. A secured loan is protected by an asset or collateral such as a home or car.
True / False
5. If your credit card was lost or stolen and used to charge items you didn’t authorize, you are responsible for what amount?
a. Up to $50
b. Up to $100
c. Up to $500
d. All unauthorized charges
6. Negative financial information (excluding bankruptcy) can stay on your credit report for:
a. 2 years
b. 5 years
c. 7 years
d. 10 years
7. Adjustable rate mortgages are only available to potential home owners who don’t qualify for a fixed rate mortgage.
True / False
8. In financial transactions, a CD is a:
a. Certificate of Debt
b. Certificate of Deposit
c. Citizens Deposit
d. Certificate of Collateral
1. (C) A credit report is a loan and bill payment history.
It is kept by a credit bureau and used by financial institutions and other potential creditors to determine how likely it is that you will repay a future debt. Information in your credit report can affect your ability to get a job, a loan, a credit card or insurance.
2. (A) It stands for Annual Percentage Rate.
The APR is a measure of the cost of credit, expressed as a yearly interest rate. Usually, the lower the APR, the better for you.
3. (D) No one.
Your investments in the stock market are not insured. Know the risks before investing in the stock market.
Secured loans usually offer lower rates, higher borrowing limits and longer repayment terms than unsecured loans. As the term implies, a secured loan means you are providing “security” that your loan will be repaid according to the agreed terms and conditions. Secured loans can be used towards home, auto, boat, motorcycle or recreational vehicles.
5. (A) You are responsible for up to $50.
Your maximum liability under federal law for unauthorized use of your credit card is $50. If you report the loss or theft before your credit cards are used, the Fair Credit Billing Act says the card issuer cannot hold you responsible for any unauthorized charges. If a thief uses your cards before you report them missing, the most you will owe for unauthorized charges is $50 per card. If the loss or theft involves your credit card number, but not the card itself, you’re not responsible for unauthorized use.
6. (C) 7 years.
Accurate negative information generally can stay on your report for seven years; bankruptcy information may be reported for 10 years.
Adjustable Rate Mortgages and Fixed Rate Mortgages are both options for purchasing a home. Adjustable rate mortgages are home loans in which the interest rate is adjusted based on the changes in the economic index. A fixed-rate mortgage has interest rates that stay constant throughout the term of the loan. Check out the Borrowing tab on our website, unisoncu.org, to learn more.
8. (B) Certificate of Deposit
A CD, in this case, is a type of investment savings account that earns a fixed interest rate over a specified period of time. At a credit union it is called a share certificate of deposit, which earns dividends.