Credit & Debt: Checkpoint 1

Covers credit scores, how credit cards work, and the cost of minimum payments.

Five questions on how credit works and the real cost of carrying a balance.

Question 1 of 5 The single largest factor affecting a credit score is usually:

Length of credit history Payment history Number of credit cards owned Your income

Question 2 of 5 A credit card's 'grace period' means:

You never have to pay the balance No interest is charged if you pay the full statement balance on time Late payments are always forgiven Interest rates are cut in half

Question 3 of 5 Credit utilization refers to:

How often you use a credit card The share of your credit limit currently in use How many years you've had credit The interest rate on your card

Question 4 of 5 Why does paying only the minimum payment barely reduce a credit card balance?

Minimum payments are illegal on large balances Most of the minimum payment goes toward interest, not the balance The bank keeps the payment as a fee Minimum payments are optional

Question 5 of 5 A secured credit card is often recommended for someone with no credit history because:

It has no interest rate at all It requires a deposit, making it accessible to build history safely It can only be used online It doesn't report to credit bureaus

← Back to The True Cost of Minimum Payments Next lesson → Good Debt vs Bad Debt

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