Financial Terms Test 1

The cost of borrowing money is referred to as ______.

• Interest

• Credit

• Annual Percentage Rate

• Credit Line

The amount charged if your payment is received after the billing due date.

• Late payment fee

• Withdrawal fee

• Overdue fee

• Minimum due

The maximum amount you are allowed to carry as a balance on the card.

• Interest

• Credit limit

• APR

• All of the above

Which of these is considered a danger of using a credit card?

• No cash needed

• Convenient

• Leads to overspending

• Earns rewards

Your credit score is not configured of which of the following:

• Payment history

• Amount owed

• Where you live

• Length of credit history

To build a good credit history you should...

• Quickly open as much credit as possible

• Pay on time and as much of the balance as possible

• Use the maximum credit allowed on all your credit cards

• All of the above

Over time, people who pay off their credit card balance in full every month will pay less in interest on their credit card.

• True

• False

What is credit?

• Free money

• Standard of living

• Debit

• Borrowed money

What is a credit score?

• A credit score is a three-digit number that reflects how likely you are to fail at paying your debts

• A five-digit number that reflects how likely you are to repay your debt.

• A three-digit number that reflects how likely you are to repay your debt.

• A credit score is a five-digit number that reflects how likely you are to fail at paying your debts

What financial habits determine your credit score?

• Payment history and amount you owe

• Length of credit history and amount of new credit applied for recently

• Types of credit open

• All of the above