Credit and Loans Test

Front

What is one benefit of borrowing money from a friend or family member instead of from the bank?

Back

More flexible repayment terms.

Front

What is a potential downside of asking a friend for a loan?

Back

It can strain the friendship.

Front

What are some common reasons people borrow money?

Back

Common reasons people borrow money include covering unexpected expenses, financing large purchases, consolidating debt, paying for education, and managing cash flow.

Front

How can borrowing help build your credit?

Back

Borrowing can help build your credit by establishing a positive payment history.

Front

What is the advantage of a lower interest rate from a friend?

Back

Lower borrowing costs and increased financial flexibility.

Front

What is the key difference between a credit card and a debit card?

Back

A credit card borrows money; a debit card uses your own funds.

Front

What question is MOST useful in deciding between a credit card and a bank loan?

Back

What is the total cost of borrowing, including interest and fees, for the amount I need?

Front

What is one reason to be careful about using credit?

Back

It can lead to accumulating debt.

Front

What does the word "balance" mean?

Back

The amount owed.

Front

What are the 3 top credit reporting agencies?

Back

Experian, TransUnion, Equifax