Unit 3 Exam Spring 2025 (Lessons 7, 8, and 9)

Front

What is the primary difference between "credit" and "debt"?

Back

Credit is the ability to borrow money, while debt is the amount of money borrowed.

Front

Which of the following is a benefit of using credit responsibly? It ensures that you will never face financial difficulties., It allows you to avoid paying any interest on loans., It helps you build a positive credit history over time., It guarantees approval for all future credit applications.

Back

It helps you build a positive credit history over time.

Front

What could be a consequence of missing credit card payments?

Back

It could negatively impact your credit score.

Front

Which of the following is an example of revolving credit? Auto loan, Utility bill, Credit card, Student loan

Back

Credit card

Front

Which source of credit typically targets individuals who may not qualify for traditional loans and charges high-interest rates? Options: Retail stores, Payday lenders, Financial institutions, Government programs

Back

Payday lenders

Front

What distinguishes a credit card from a debit card?

Back

A credit card allows you to borrow money for purchases, while a debit card draws money directly from your bank account.

Front

What happens if you only pay the minimum payment on your credit card balance?

Back

You may incur interest on the remaining balance.

Front

What is a late fee in terms of credit card payments?

Back

A penalty charged for not paying at least the minimum payment by the due date.

Front

You got a quote for Renter's Insurance for $214 per year with a $1,000 deductible, what would your monthly premium be for this policy? (Round answer to the nearest cent)

Back

$17.83

Front

What happens if a homeowner defaults on their mortgage loan?

Back

The lender can foreclose on the property and sell it to recover the unpaid loan balance.