Got Dollars and Sense?

Take this money quiz.

1. Mailing your credit card payment a week in advance of its due date is a good way to avoid being charged late fees.
   TRUE     FALSE
   
2. Since credit card companies are financial institutions, they, like banks, are under the supervision of the Federal Reserve or the Federal Deposit Insurance Corp.
   TRUE     FALSE
   
3. Even if you pay other bills late, it’s important to pay your credit cards on time to avoid late fees and keep your interest rates down.
   TRUE     FALSE
   
4. Large banks like Citibank won’t make “payday” loans—small short-term loans geared to low-wage earners with interest rates as high as 500%.
   TRUE     FALSE
   
5. It’s a good idea to check your credit score regularly.
   TRUE     FALSE
   
6. According to a U.S. Dept. of Education study, a college degree is worth 75% more—or $1 million—over a worker’s lifetime than a high school diploma.
   TRUE     FALSE
   
7. The average college student owes more than $50,000 in student loans by the time they graduate.
   TRUE     FALSE
   
8. Paying credit card balances in full each month is a good way to take part in their perk and reward programs without overspending.
   TRUE     FALSE
   
9. In the student loan industry, lenders who buy loans from other banks must honor the consumer benefits that come with them, such as lower interest rates for on-time payments.
   TRUE     FALSE
   
10. Medicare pays for long-term care for all seniors.
    TRUE     FALSE

» Answers

Answers

1. TRUE. Watch out, though. The advocacy group Consumer Action has had numerous complaints from consumers who suspect that credit card companies are holding on to their payments to generate late fee revenue. Card issuers are mailing statements closer to due dates.
2. FALSE. The Office of the Comptroller of the Currency oversees the majority of credit card companies. Its operations are funded by the credit card industry.
3. FALSE. The Universal Default Clause in the fine print of every credit card agreement says that if you are more than 30 days late on any payment to anyone, the interest rate on credit card could shoot up and your credit score could be damaged.
4. TRUE. Citibank won’t make the small—and some say predatory—loans, but its parent company Citigroup led the initial public offering on Wall Street for one of the payday industry’s giants, Dollar Financial.
5. TRUE. Keeping an eye on your credit profile for incorrect information is wise, but too many inquires can actually bring your credit score down.
6. TRUE. Many young people face a hard choice: a lifetime of underearning or the possibility of being saddled with decades worth ofunmanageable student debt.
7. FALSE. The average student owes $30,000 in student debt and $20,000 in consumer debt by graduation.
8. FALSE. Credit card issuers are now raising interest rates, rolling back reward programs and charging for services that used to be free for those who pay their balances in full each month.
9. FALSE. This is not guaranteed. Borrowers must get everything in writing from lenders at the outset to ensure that benefits “travel”with their loans.
10. FALSE. Medicare pays only for medically necessary home health care or care in a skilled nursing facility. It does not cover non-skilled care to assist people with the activities of daily living such as dressing, bathing and using the bathroom.