W!SE FINANCIAL LITERACY 2025
CERTIFICATION TEST
ANSWER ALL QUESTIONS IN THIS SECTION
QUESTION 1
How does the degree of risk influence the interest rate charged for credit -
ANSWERS-* Higher risk = higher interest rate
*Lower risk = lower interest rate
QUESTION 2
Debt to credit ratio - ANSWERS-*Amount of available credit you are using
*divide the aggregate outstanding balance of all your credit cards by the total credit
limit across all the cards
*One should try to keep that percentage to below 30%
QUESTION 3
Credit reports - ANSWERS-Report detailing your use of credit
*Identifying information (name, address, etc.)
* Account information (date opened, balance, payment
history)
END OF
PAGE 1
, W!SE FINANCIAL LITERACY 2025
CERTIFICATION TEST
*Credit inquiries (companies who've checked your
credit)
*Important because it shows if you've been
seeking new credit
*Public record and collection information
* Such as: bankruptcies, liens, law suits, judgments
and collections
QUESTION 4
Three leading credit reporting agencies (Equifax, TransUnion, Experian) -
ANSWERS-*Should have same info, but don't always
*Should check once/year for accuracy
QUESTION 5
Consequences of a lost or stolen credit card - ANSWERS-Identity theft, use of
your credit
*In the event that your credit card is stolen in the United States, federal law limits
the liability of card holders to $50 regardless of the amount charged on the card by
the unauthorized user. In today's world of electronic fraud, if just the credit card
END OF
PAGE 2
, W!SE FINANCIAL LITERACY 2025
CERTIFICATION TEST
account number itself is stolen, federal law guarantees that the card holder has a
zero liability to the issuer.
* As a card holder, you should notify the issuer immediately if you notice that your
credit card is missing or stolen. This early notification will give the issuer time to
help you with the following:
1. Verify if and where fraud has occurred.
2. Remove unauthorized charges from your credit.
3. Close down your account to prevent future
fraudulent charges.
4. Issue you a new card and account number.
QUESTION 6
Consequences of a lost or stolen credit card - ANSWERS-Several credit card
companies have adopted a "zero
liability" policy which means the consumer is not held
responsible for any fraudulent charges. You should also
check with the three major credit reporting agencies and obtain a copy of your
credit report to be sure that nothing else has been accessed fraudulently.
*Be wary of credit card protection offers. This type of
insurance is unnecessary because federal law limits your credit card fraud liability.
But scam artists try to sell $200-300 credit card insurance by falsely claiming that
cardholders face significant financial risk if their cards are misused. According to
END OF
PAGE 3
CERTIFICATION TEST
ANSWER ALL QUESTIONS IN THIS SECTION
QUESTION 1
How does the degree of risk influence the interest rate charged for credit -
ANSWERS-* Higher risk = higher interest rate
*Lower risk = lower interest rate
QUESTION 2
Debt to credit ratio - ANSWERS-*Amount of available credit you are using
*divide the aggregate outstanding balance of all your credit cards by the total credit
limit across all the cards
*One should try to keep that percentage to below 30%
QUESTION 3
Credit reports - ANSWERS-Report detailing your use of credit
*Identifying information (name, address, etc.)
* Account information (date opened, balance, payment
history)
END OF
PAGE 1
, W!SE FINANCIAL LITERACY 2025
CERTIFICATION TEST
*Credit inquiries (companies who've checked your
credit)
*Important because it shows if you've been
seeking new credit
*Public record and collection information
* Such as: bankruptcies, liens, law suits, judgments
and collections
QUESTION 4
Three leading credit reporting agencies (Equifax, TransUnion, Experian) -
ANSWERS-*Should have same info, but don't always
*Should check once/year for accuracy
QUESTION 5
Consequences of a lost or stolen credit card - ANSWERS-Identity theft, use of
your credit
*In the event that your credit card is stolen in the United States, federal law limits
the liability of card holders to $50 regardless of the amount charged on the card by
the unauthorized user. In today's world of electronic fraud, if just the credit card
END OF
PAGE 2
, W!SE FINANCIAL LITERACY 2025
CERTIFICATION TEST
account number itself is stolen, federal law guarantees that the card holder has a
zero liability to the issuer.
* As a card holder, you should notify the issuer immediately if you notice that your
credit card is missing or stolen. This early notification will give the issuer time to
help you with the following:
1. Verify if and where fraud has occurred.
2. Remove unauthorized charges from your credit.
3. Close down your account to prevent future
fraudulent charges.
4. Issue you a new card and account number.
QUESTION 6
Consequences of a lost or stolen credit card - ANSWERS-Several credit card
companies have adopted a "zero
liability" policy which means the consumer is not held
responsible for any fraudulent charges. You should also
check with the three major credit reporting agencies and obtain a copy of your
credit report to be sure that nothing else has been accessed fraudulently.
*Be wary of credit card protection offers. This type of
insurance is unnecessary because federal law limits your credit card fraud liability.
But scam artists try to sell $200-300 credit card insurance by falsely claiming that
cardholders face significant financial risk if their cards are misused. According to
END OF
PAGE 3
