Test your knowledge of Budgeting and Debt Management.

Question 1:
Annual Percentage Rate (APR) is the percentage cost (or relative cost) of credit on a yearly basis.

A - Annual Percentage Rate (APR) is the percentage cost (or relative cost) of credit on a yearly basis. - True
B - Annual Percentage Rate (APR) is the percentage cost (or relative cost) of credit on a yearly basis. - False

Question 2:
Compound interest is one of the most expensive ways to borrow and should be avoided at all costs.

A - Compound interest is one of the most expensive ways to borrow and should be avoided at all costs. - True
B - That's incorrect. Compound interest is one of the most expensive ways to borrow and should be avoided at all costs. - False

Question 3:
Finance charge is the total dollar amount you pay to use credit. It includes interest costs and other costs such as service charges.

A - Finance charge is the total dollar amount you pay to use credit. It includes interest costs and other costs such as service charges. - True
B - That's incorrect. Finance charge is the total dollar amount you pay to use credit. It includes interest costs and other costs such as service charges. - False

Question 4:
Late fees can be charged if your payment is just one day late and can also lead to an increase in your interest rate.

A - Late fees can be charged if your payment is just one day late and can also lead to an increase in your interest rate. - True
B - Late fees can be charged if your payment is just one day late and can also lead to an increase in your interest rate. - False

Question 5:
As a result of the Truth in Lending Law of 1969, creditors are required to state the cost of borrowing as a dollar amount so that consumers will know exactly what the credit charges are and can compare credit costs and shop for the best rates.

A - As a result of the Truth in Lending Law of 1969, creditors are required to state the cost of borrowing as a dollar amount so that consumers will know exactly what the credit charges are and can compare credit costs and shop for the best rates. - True
B - As a result of the Truth in Lending Law of 1969, creditors are required to state the cost of borrowing as a dollar amount so that consumers will know exactly what the credit charges are and can compare credit costs and shop for the best rates. - False