Whether you’re preparing for the transition to college or are already immersed in the college experience, you might be introduced to a credit card. No matter which stage you’re in, understanding credit cards is crucial for managing your finances well. Soon, you’ll find that you can use your shiny plastic card for textbooks, dorm supplies, gas, and dining out. Then, after the month is up, you’ll get a credit card bill. Sounds simple, right? While all that information is true, credit cards are a little more complex.
Have you ever heard of an interest rate or APR? How about the FICO credit score range? Do you know how a credit card is different from a debit card? While that was a lot at once, these credit card questions are not meant to overwhelm you. Whether you’re a beginner or seasoned credit card user, test your knowledge by taking this credit card IQ quiz. Let's find out if you have what it takes to get a perfect score.
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How does a credit card work?
When you use your credit card to buy something, you are using borrowed money that you will have to pay back at a later date. Throughout the month, any purchases you make will appear on your credit card statement. You can then choose to pay your statement in full or carry a balance over to next month’s statement. The institution who issued you the card– most likely a credit card company or a credit union–will include interest charges on your credit card bill if not paid in full. As you use your card and make regular payments, you will begin to develop a positive credit history. Having good credit is important when the time comes to buy a car, rent an apartment, and more.
How can I improve my credit card IQ?
Using your credit card improperly can lead to bad spending habits, credit card debt, and poor credit. A good way to bolster your credit card knowledge is to start reading more financially-focused articles. Soon you’ll be an expert in annual fees, credit reports, cash advances, and all things involving credit. In the meantime, jump start your learning and research by reading the following articles.
Expenses in college can add up quickly, which is where a credit card can come in. Because a credit card gives you access to a large sum of money, it’s important to be intentional and responsible with your spending habits. Here are tips from ten college students to help you learn from others who have experience with using a credit card themselves.
Credit card issuers expect cardmembers to understand their lingo. When applying for your different credit card offers, there may be words that you don’t understand. Certain phrases, such as annual percentage rate or late payment fee, can seem intimidating if you don’t know what they mean. With this terminology cheat sheet, you will be prepared for any credit information that is thrown your way.
Before you open a credit card, you may have questions about how to use it. You might also be curious about why you should get a credit card and how to avoid debt. Becoming aware of good credit card habits will help you save money, boost your credit score, and more.
Credit cards are an important tool for building credit. In college, many students find themselves experiencing personal freedom and financial independence for the first time. College is a prime occasion for meeting new people, learning new things, and having fun. In addition, it’s a great opportunity to build your credit score with a positive payment history.
Whether you’re in high school or college, it’s important to know the basics before using your credit card. Take initiative in learning everything there is to know about credit cards, like which purchases you should use it for or how to avoid credit card mistakes. With this guide, you’ll know exactly why you should get a credit card in college and how to use it properly.
Improving your financial literacy takes time. However, the more information you know, the more confident you’ll feel managing your credit. Over time, responsible credit card usage will help you build credibility with your lenders. Having good credit history means you’ll qualify for better terms on consumer credit loans and have a greater chance of your rental application being approved. Using your credit cards responsibly is the key to building a strong financial future.
Your credit card knowledge won’t come overnight. If you didn’t get a perfect score, brush up on your knowledge. Then, take the credit card quiz again. You could also share it with a friend or classmate, which is the positive kind of financial peer pressure. Keep practicing until you get all of the questions right. You’ll be on your way to the credit score of your dreams in no time!
