Do You Know Your Credit Cards?

There is no question about it, credit cards are American like baseball and apple pie. Just about everyone has at least one credit card, with many having several.

The thing is though, I find most people really don't have a good basic understanding of credit cards. Sure, we all know how to charge something on them, but do you have a grasp of how the credit process works? Do you know how the grace period works, or how much your interest rate is, etc?

This simple credit card IQ test will test your credit card knowledge and show you any areas you might want to brush your skills up in. Everyone who has a credit card should know how they work. Not knowing enough can lead to many painful lessons down the road.

Ok, let's get started. (The answers are at the end of this article. No peeking!)

1. What are the 4 major credit cards? This is an easy one.
2. How many credit cards does the average American have?
3. What is the average debt on credit cards in America?
4. What does the letters APR stand for?
5. What is the current interest rate on your credit card?
6. What functions do Trans Union and Equifax provide?
7. What is a grace period?
8. Name two examples of credit card rewards?
9. What does it cost the typical merchant to process your credit card transaction?
10. How does a credit card reward program work?
11. If your credit card is stolen and subsequently "maxed" out, how much are you responsible to pay back to the credit card company?
12. With a $2,500 balance on your credit card, about how long will it take you to pay off the debt by making the minimum monthly payment with a 21% APR

If you know the answers to most all of these questions then you are at the top of the class. The average person only knows the answers to a few of these questions. On the other hand, if you missed every question, you should take the time to educate yourself a little further. There is a good chance that you are paying too much in interest each month, and may even be having some credit issues.