Credit Test Review

Cost of credit expressed as a yearly percentage

• Credit Limit

• Cosigner

• Interest

• Annual Percentage Rate

The maximum amount of charges allowed to an account

• credit limit

• charges

• annual percentage rate

• finance charge

Borrowing a set amount with equal monthly payments

• credit card

• installment credit

• revolving credit

• interest rate

Something of value, but not money, that creditors/lenders may take if you fail to repay a loan.

• Secured Loan

• Collateral

• Interest

• Principal

Which of the following best describes a credit card?

• credit that is paid in equal monthly payments

• pre-approved credit to use for purchases now & pay for them later

• plastic card connected to the cardholder's checking account

• none of the above

How can you avoid paying interest on a credit card?

• only pay the required minimum balance

• pay the full balance every month

• only use the credit card for cash advances

• doesn't matter, interest is always paid on a credit card

Which of the following is the better option to put on credit?

• Dining out

• House

• Video Games

• Clothes

A loan that is backed by collateral and collateral can be the item being purchased

• Unsecured Loan

• Installment credit

• revolving credit

• secured loan

What do you have to pay when you borrow funds through a LOAN?

• interest plus collateral

• principal plus interest

• just the principal amount

• triple the amount of the loan

The Truth in Lending Act states all of the following except

• the card holder is only liable up to $50 if card is stolen

• the card holder will get a new card for free

• if the number is stolen, the card holder has $0 liability

• the card holder must submit a letter within 60 days of fraud