Unit 2: Credit, Debt and Interest

What is one benefit of borrowing money from a friend or family member instead of from the bank?

• You don't have to repay your friends or family if you don't want to

• You can borrow more money from a friend or family member because they have more cash than banks

• Friends and family cannot legally charge you interest on the loan, and neither can banks

• Friends and family will typically work with you to set up a repayment plan you can afford

Which age group tends to have the most credit card debt?

• Young adults

• Middle-aged people

• Senior citizens

• Credit card debt is evenly distributed among all age groups

Using this portion of a credit card statement, how much did the credit card owner pay toward their bill last month?

• $167.49

• $267.49

• $400

• $2,425

Each of the following factors impacts your credit score EXCEPT...

• Payment history

• Debit Card Balance

• Mix of credit types

• Length of credit history

What is the key difference between a credit card and a debit card?

• Credit cards allow you to borrow money to pay for things, while debit cards take money straight from your own checking account

• Wealthy people use credit cards, while people with lower incomes use debit cards

• Credit cards come from credit unions, while debit cards come from banks

• You can only use credit cards if you are over 25, but you can use debit cards as long as you are over 18

Helena has a credit card limit of 10,000 dollars on her credit card. She has spent all 10,000 dollars online shopping. What is another statement for what has she done?

• paid her minimum balance

• maxed out her credit card

• Paid interest on her statment

• applied for a loan

What is the best way to avoid going into large debt or paying large amounts of interest on your credit card?

• Avoid paying the bill every month so your bank account stays high

• Pay the minimum monthly payment on time every month

• Pay half your balance every month

• Pay your full balance every month

Looking at this credit card statement, what is the minimum payment the needs to paid for the month?

• $245.00

• $40.00

• $150.00

• $400.00

At what age can you apply for a credit card or loan?

• 21

• 16

• 18

• 80

Miguel's parents keep telling him he should worry about his credit score. He says, "Why bother?" Why should Miguel care?

• A high credit score will make it easier for him to get loans or credit cards with better interest rates

• A low credit score will make it easier for him to get loans or credit cards with better interest rates

• If his credit score is positive, lenders will allow him to pay back only a portion of his loan instead of the whole balance

• Miguel will not be able to apply for colleges if he doesn't have a strong credit score