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Are you financially literate? Test your consumer savvy

Today marks the start of the sixth annual National Consumer Protection Week, organized by public and private consumer protection agencies and advocates around the country. The theme this year is "Financial literacy: earning a lifetime of dividends."

Every day consumers engage in financial transactions, from shopping for a mortgage or loan to deciding how to pay for the groceries. If you'd like to check up on how financially "literate" you are, take the following quiz, printed in full on the Web site Then check your answers against those given below. You may be surprised to learn how much, or little, you know.

1. What is a credit report?

2. In terms of credit, what does APR stand for?

3. Who insures your stocks in the stock market?

4. Does federal law give you three days to cancel the purchase of a new or used car from a dealer?

5. Does the kind of car you own affect the price you pay for auto insurance?

6. What is a reverse mortgage?

7. How many days does a creditor have to acknowledge your written complaint about a billing error?

8. If your credit card was lost or stolen and used to charge items you didn't authorize, what amount are you responsible for?

9. How long does negative financial information stay on your credit report?

10. What do "points" refer to in the home mortgage application process?

11. Does federal law require that warranties be available for you to read before you buy a product?

12. Does each state have a law that lets pharmacists substitute less expensive generic drugs for many brand name products?

13. Can you use unit pricing at a grocery store to easily compare the cost of any brand and any package size?

14. Is the recommended gasoline for most cars regular octane?

15. Are all telephone numbers that begin with "8" toll-free?

16. What is a CD in a financial transaction?

17. Does the "rule of 72" tell you how long it will take to double your money?


1. A credit report is your loan and payment history used by financial institutions and other potential creditors in determining your credit worthiness. Information in your credit report can affect your ability to get a loan, a job, a credit card or insurance.

2. APR stands for annual percentage rate, expressed as a yearly interest rate, and tells you the cost of credit.

3. No one. Your investments in the stock market are not insured.

4. There is no federal law giving you three days to cancel a car purchase, although some dealers may offer a "cooling off" period, money-back guarantee, or "no questions asked" return policy.

5. Yes, your car's sticker price plus the cost to repair it, overall safety record and likelihood of theft all affect your premium.

6. Reverse mortgages allow homeowners over age 62 to convert the equity in their homes to cash while retaining ownership. Generally, the mortgage does not have to be repaid as long as you live in the home. In return, the lender holds some, or all, of your home's equity.

7. Creditors have 30 days to acknowledge receipt of a complaint, unless it has already been resolved.

8. The maximum liability under federal law for unauthorized credit card use is $50, or none if you report the loss or theft of your card before its use, or if only your number is stolen, but not the actual card.

9. Adverse information stays on your credit report for seven years, with certain exceptions. Bankruptcy information, for instance, may be reported for 10 years.

10. Points are fees you pay the lender for the loan, generally at closing. Points can sometimes be part of the loan amount. One point equals 1 percent of the loan.

11. Federal law requires that warranties be available for consumers to read before buying a product, even when shopping by catalog or on the Internet.

12. Each state has a law allowing pharmacists to substitute less expensive general drugs.

13. Unit pricing allows cost comparison between different sizes and brands of products by giving the price per "unit," such as an ounce, pound, quart, etc.

14. In most cases, manufacturers recommend regular octane gas. Unless your engine is knocking, there's absolutely no benefit to using a higher octane gas than recommended.

15. Numbers beginning with 800, 888, 877, or 866 are nearly always free. Companies providing audio entertainment or information may charge for calls to toll-free numbers, but only if they follow the Federal Trade Commission's 900-Number Rule, which requires a company to ask for payment with a credit card or to make billing arrangements before providing the service. Some long-distance numbers also begin with an "8," such as area code 809, which serves the Dominican Republic.

16. In financial transactions a CD is a certificate of deposit, a kind of savings account that earns a fixed interest rate over a specified period of time.

17. The "Rule of 72" tells you how long it will take to double your money. To use it, divide 72 by the interest rate. The answer is the number of years it will take.

For more information, check out the following Web sites: Federal Trade Commission,; Department of Financial Institutions, State of Wisconsin,; Insurance Information Institute,; U.S. Food and Drug Administration,; Food Marketing Institute,; American Automobile Association;; Federal Communications Commission;; Federal Reserve Bank of Dallas;

Action solves problems and gets answers for you. If you have a question, or your own attempts to resolve a consumer complaint have failed, write Times Action, P.O. Box 1121, St. Petersburg, FL 33731, e-mail, or call your Action number, (727) 893-8171, or, outside of Pinellas, toll-free 1-800-333-7505, ext. 8171, to leave a recorded request.

We will not be responsible for personal documents, so please send only photocopies. If your complaint concerns merchandise ordered by mail, we need copies of both sides of your canceled check.

We may require additional information or prefer to reply by mail; therefore, provide a full mailing address, including ZIP code. Names of letter writers will not be omitted except in unusual circumstances. Letters may be edited for length and clarity.