The Ultimate Revolving Credit Quiz


By: Staff

4 Min Quiz

Image: refer to hsw

About This Quiz

Revolving credit has its advantages and disadvantages: you can use the money to buy anything you'd like, but the temptation to over-spend can be difficult to resist. You can pay back the money at your convenience, but if get behind on your payments you can accrue massive debt.

When you revolve your credit you are doing which of these?

Revolving your credit means carrying a debt balance from month to month, usually for an undefined period of time.


What is the range of interest that credit card companies usually charge?

Once a balance carries over to the next month, the interest piles up quickly. Most companies charge between 10 and 28 percent interest.


What was the approximate revolving credit debt of U.S. consumers in 2007?

American consumers are crazy for credit. As of 2007 their total debt was over $900 billion dollars.


What percentage of credit card holders pay their credit card bills on time?

Less than half of all credit card holders manage to pay their monthly balances on time -- 40 percent.


What percentage of Americans carry a credit debt of over $9,000?

A total of 8 percent of Americans carry more than $9,000 in debt. It can take decades to pay off that amount, if you only make minimum payments.


What are the two basic types of credit?

There are two basic types of loans: closed-end, which have to paid in full by a specific date, and open-end, which can carry over indefinitely.


Which of these statements best describes a closed-end loan?

A closed-ended loan has a set amount, a set interest rate, and a set date by which it must be paid back. It does not carry over from month to month, and the lender may not change the conditions of the loan.


Which of these is an example of a closed-end loan?

Mortgages are the most common closed-end loans. You borrow a specific amount to pay for your house, and the payments you make are fixed until the loan has been repaid.


Why is a credit card considered a type of open-end loan?

Open-end loans, such as credit cards, do not have to be paid back by a specific date, and the monthly payments are not fixed.


The minimum amount you must pay on a credit card balance is usually around what percentage?

Credit card companies do require that you pay back some of your balance each month. Usually that amount must cover 2 - 4 percent of your current balance.


What percentage of Americans make only minimum payments on their monthly balance?

One in six Americans is making minimum payments on their credit cards. These balances can quickly grow to unattainable sums.


How do you calculate your home's equity?

Your home equity is the amount of money you would have left over if you sold your home and paid off your mortgage.


What is the biggest advantage to a revolving credit loan?

Unlike a closed-end loan, which you usually must use to pay for a specific thing -- a car, a house -- an open-end loan, such as a credit card, can be used to buy whatever you'd like.


What percentage of Americans have 10 credit cards or more?

As many as 10 percent of Americans have 10 or more different credit cards. That's how the debt really piles up.


One of the most problematic aspects of revolving credit is which of these fine-print conditions?

Credit card companies retain the right to change the conditions of your loan at any time. You might receive a letter in the mail stating that your limit has been reduced by half!


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