Credit Basics

All of the following are dangers of credit, EXCEPT:

• Overspending
• Can be dangerous in tough economic times
• Can increase your financial options
• Can be expensive

True or False: Credit can lead to overspending.

• True
• False

Which of the following is NOT a factor to consider when taking out a loan?

• Length of the loan
• Total Cost of the loan
• Impact of the monthly payment on your budget
• How much time it takes to receive the loan

How do you ruin your credit?

• Have someone Co-Sign your loan
• Not pay your bills
• Get a gas/Apartment card
• Cats

Which of the following would IMPROVE your credit score. 

• Closing out old credit cards. 
• Paying off your credit card bill. 
• Using a large portion of your credit limit. 
• Opening a new savings account. 

Interest is: 

• A charge for lending money to a bank
• The amount owed for borrowing money
• the amount added into your savings when opening a bank account
• a charge for the convenience of accessing money stored in your bank account

The "term" is the initial amount of money borrowed in a loan.

• True
• False

______________ is the amount of money you pay to use someone else's money.

• Interest
• Credit
• Principal
• Term

An example of closed-ended credit is a(n) _______________

• Installment loan
• Credit card
• Equity Credit line

Type of loan used specifically for purchasing a home is a __________

• Mortgage
• Student Loan
• Equity Line of Credit
• Credit Card