8.2 Using Credit Lesson

8.2 Using Credit Lesson

Poll

Which of the following are positive aspects of using a credit card?

(Choose all that apply)

• You can buy something now and pay for it later

• It is easy to go into debt

• You can build your credit score and credit history

• The high cost and interest.

Multiple Select

What are two types of interest used when computing finance charges?

• simple interest

• compound interest

• annual percentage rate (APR)

• monthly interest rate

Multiple Choice

The annual cost of credit a lender charges for extending credit is the ___________.

• annual percentage change (APC)

• average percentage increase (API)

• annual percentage rate (APR)

• annual percentage yield (APY)

Multiple Choice

The total paid for the use of credit is based primarily on what three factors?

• birthdate, gender, location

• interest rate charges, amount of credit used, and length of the repayment period

• checking account, savings account and debt

Multiple Choice

What is the formula for simple interest?

• I = P x R x T

• I = APR x amount

• I = R x p (rt)

Multiple Select

Credit cards may charge fees for which of the following:

(Select all the apply)

• Late payments

• Early Payment

• Cash advances

• Balance transfers

• Exceeding credit limit

Multiple Choice

_____________ credit is a short-term loan at a high interest rate that is granted regardless of the borrower’s credit history.

• Easy-access credit

• Payday loan

• Unsecured loan

• Title loan

Multiple Choice

Short-term, high-interest loan that is to be repaid on the borrowers next payday.

• Easy-access credit

• Payday loan

• Unsecured loan

• Title loan

Multiple Choice

A secured, short-term, high-interest loan made using a borrowers vehicle as collateral.

• Easy-access credit

• Payday loan

• Unsecured loan

• Title loan

Multiple Choice

____________ are businesses that give customers high-interest loans with personal property held as collateral.

• Title loan offices

• Pawnshops

• Rent-to-own

• Credit card companies

Multiple Choice

A cash advance is...

• Loan with personal property held as collateral.

• Loan against the available credit on an individual’s account.

• Loan where the borrowers vehicle is held as collateral.

Multiple Choice

What are the three most common types of credit cards?

• General-purpose, store credit and travel and entertainment credit cards

• General-purpose, payday loan, cash advance

• Store credit, vehicle loan, mortgage loan

Multiple Choice

Subprime credit cards are offered to people who have poor credit history. Generally...

• the interest rates are high and the credit limit is low.

• the interest rates are low and the credit limit is high.

Multiple Choice

The time between the billing date and the beginning of interest charges is called the _______________.

• APR

• grace period

• payment period

Multiple Choice

A credit card statement is...

• a summary of the credit card terms.

• a summary of your credit use for a billing period.

• a summary of your savings account.

Multiple Choice

Which of the following is most likely to incur a fee from a credit lender?

• having a zero balance

• closing the account

• making an early payment

• exceeding a credit limit