Credit 101 Quiz: Learn Credit Basics from Bank of America

Test your knowledge of credit basics with this simple quiz.

Used wisely, credit can be a great way to help you accomplish your financial goals. You can use credit to buy or improve your home, purchase a car, or pay for college. But without a good understanding of how interest rates, late payments and other credit issues can affect your total financial picture, it can be hard for you to manage your credit effectively. And that could cost you money.

So, how much do you know about how credit works? Do you know what rates you’re paying on your credit card, or when your next payment is due? This quiz can help you pinpoint what you know — and what you don’t know — about some key credit basics. And as a bonus, the answer key will point you toward articles on this site that can help you learn even more about managing credit.

The Quiz

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What information can be found on your credit card statement?

A. Your payment due date.
B. Your APRs for different types of transactions.
C. The amount of your total available credit.
D. All of the above.

Yes, D is correct. Your statement contains all this information and more. Reviewing it carefully each month is a great way to help keep your finances on track. To learn more, see Your enhanced Bank of America credit card statement.

Sorry, the correct answer is D. Your statement contains all this information and more. Reviewing it carefully each month is a great way to help keep your finances on track. To learn more, see Your enhanced Bank of America credit card statement.

What’s the best way to ensure a good credit score?

A. Write a letter to the credit bureau.
B. Pay all your bills on time, every time.
C. Hire a consultant.
D. Close all of your credit accounts.

Yes, B is correct. Paying your bills on time shows lenders you know how to handle credit responsibly. For more information, see How to improve your credit score.

Sorry, the correct answer is B. Paying your bills on time shows lenders you know how to handle credit responsibly. For more information, see How to improve your credit score.

True or False: A “fixed” credit card APR can never change.

True.
False.

Yes, False is correct. Fixed APRs are not tied to a variable index like the prime rate, but they are not guaranteed, either — most issuers reserve the right to change even a fixed APR. For more information, see Basic facts about credit card rates.

Sorry, the correct answer is False. Fixed APRs are not tied to a variable index like the prime rate, but they are not guaranteed, either — most issuers reserve the right to change even a fixed APR. For more information, see Basic facts about credit card rates.

Jack is having trouble paying his credit card bill this month. What should he do?

A. Ignore it and wait until he has the money.
B. Get another credit card and use that one to pay the first card.
C. Call his credit card company to discuss his options.
D. Screen his calls to avoid bill collectors.

Yes, C is correct. Always contact your creditors as soon as you have a payment problem — they may have options that could help you get back on track with your payments. For more information about maintaining your credit, see How to improve your credit score.

Sorry, the correct answer is C. Always contact your creditors as soon as you have a payment problem — they may have options that could help you get back on track with your payments. For more information about maintaining your credit, see How to improve your credit score.

Which of the following are signs that debt may be a problem for you?

A. You’ve maxed out the credit lines on your credit cards
B. You’ve had to skip paying some of your bills, or you’ve paid some late.
C. Bill collectors have started calling.
D. All of the above.

Yes, D is correct. These are just some of the signs that debt may be a problem. To learn more about warning signs — and solutions — see A "Get out of Debt" checklist.

Sorry, the correct answer is D. These are just some of the signs that debt may be a problem. To learn more about warning signs — and solutions — see A "Get out of Debt" checklist.

What percentage of your monthly income should be used for debt payments (other than rent or mortgage)?

A. At least 35%.
B. No more than 20%.
C. No more than 60%.
D. None.

Yes, B is correct. Using more than 20% of your net monthly income for debt payments can affect both your credit score and your overall budget. For more information about how debt can affect your credit score, see How to understand your credit report and credit score.

Sorry, the correct answer is B. Using more than 20% of your net monthly income for debt payments can affect both your credit score and your overall budget. For more information about how debt can affect your credit score, see How to understand your credit report and credit score.

Which password precautions can keep your accounts safer when you bank online?

A. Keep passwords secret.
B. Use both numbers and letters in passwords.
C. Avoid using names, birthdays or anniversaries in passwords.
D. All of the above.

Yes, D is correct. To avoid fraud, always choose hard-to-guess passwords and guard them carefully. For more information about protecting your account, see How to keep your card safe.

Sorry, the correct answer is D. To avoid fraud, always choose hard-to-guess passwords and guard them carefully. For more information about protecting your account, see How to keep your card safe.

Jane just got a credit card offer with a low introductory rate. What does she need to find out before she accepts the offer?

A. How long the low rate will last.
B. What the rate will be after the introductory period ends.
C. Whether there are any fees associated with the offer.
D. All of the above.

Yes, D is correct. Getting all the details about an offer makes it easier to decide if it's right for you. For more information, see Three things you should know about credit card rates.

Sorry, the correct answer is D. Getting all the details about an offer makes it easier to decide if it's right for you. For more information, see Three things you should know about credit card rates.

If you lose your credit card, what should you do?

A. Don’t worry about it — it will probably turn up.
B. Notify the police, they’ll handle it.
C. Call your credit card company immediately.
D. Panic.

Yes, C is correct. If your card is lost or stolen, your credit card company can immediately close your account so no one else can use it. For more information about protecting your account, see How to keep your credit card safe.

Sorry, the correct answer is C. If your card is lost or stolen, your credit card company can immediately close your account so no one else can use it. For more information about protecting your account, see How to keep your credit card safe.

When paying your credit card bill, what should you do?

A. Pay at least the total minimum payment and be sure it is received by the payment due date.
B. Drop it in the mail the day it’s due — a couple days late won’t matter.
C. Skip it this month if you’ve got a lot of other bills.
D. Don’t worry about the due date since you’re paying online.

Yes, A is correct. Paying on time saves you money by avoiding late fees, and can help maintain a good credit history. For more tips about managing credit card fees, see Reducing the cost of credit.

Sorry, the correct answer is A. Paying on time saves you money by avoiding late fees, and can help maintain a good credit history. For more tips about managing credit card fees, see Reducing the cost of credit.

Before applying for a credit card, the most important question to ask is:

A. Does the card come in your favorite color?
B. Do the terms and benefits suit both your financial situation and your lifestyle?
C. Does your favorite celebrity carry the same card?
D. What is the absolute maximum total credit line you can get?

Yes, B is correct. When choosing a credit card, you should be sure the terms are right for your finances, and the benefits and perks are right for your lifestyle. For more tips on how to choose the right card, see Which credit card is right for you?

Sorry, the correct answer is B. When choosing a credit card, you should be sure the terms are right for your finances, and the benefits and perks are right for your lifestyle. For more tips on how to choose the right card, see Which credit card is right for you?

Which actions can help you make sure your credit card bill gets paid on time?

A. Mail your payment at least seven business days before the due date.
B. If you bank online, sign up for an e-mail alert to remind you when your payment is due.
C. Ask your credit card company to change your future due dates to a more convenient time of the month.
D. All of the above.

Yes, D is correct. These are all good ways to avoid late fees — and maintain your credit history. For more tips about managing credit card fees, see Reducing the cost of credit.

Sorry, the correct answer is D. These are all good ways to avoid late fees — and maintain your credit history. For more tips about managing credit card fees, see Reducing the cost of credit.

You scored: x correct out of y.

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