Understanding Consumer Credit and Debt

Front

What is typically required to qualify for a credit card?

Back

A good credit score

Front

Which of the following is a basic provision of credit and loan laws? Lenders must provide a 30-day grace period, Interest rates must be below 10%, Borrowers have the right to know the annual percentage rate (APR), Loans must be repaid within 5 years

Back

Borrowers have the right to know the annual percentage rate (APR)

Front

What are the names of the three major credit bureaus?

Back

Equifax, TransUnion, Experian

Front

Which of the following items is typically paid for with a loan or line of credit? Groceries, A car, Clothing, Utilities

Back

A car

Front

Which strategy is effective for managing debt? Options: Ignoring bills until they are due, Paying only the minimum payment on credit cards, Creating a budget and sticking to it, Taking out new loans to pay off old ones

Back

Creating a budget and sticking to it

Front

Which of the following actions will negatively impact your credit score?
Paying bills on time,
Applying for multiple credit cards in a short period,
Keeping credit card balances low,
Checking your own credit report

Back

Applying for multiple credit cards in a short period

Front

What is the difference between a credit rating and a credit report?

Back

A credit report is a detailed history of your credit, while a credit rating is a numerical score.

Front

Which of the following is a characteristic of a secured loan? It does not require collateral, It typically has a higher interest rate than unsecured loans, It requires collateral, It is only available to businesses

Back

It requires collateral

Front

How does an amortization schedule help in understanding a loan?

Back

It lists the monthly payments and how they are applied to principal and interest.

Front

What is a key difference between voluntary and involuntary bankruptcy?

Back

Voluntary bankruptcy is filed by the debtor, while involuntary is filed by creditors.