Intro to Credit

What is an interest rate?

• it is your level of interest about a certain topic expressed as a percentage of your total interest

• The amount in terms of dollars that you have to pay back on a purchase

• it is the rate at which your interest in something expires. The higher the number, the quicker your interest expires

• The amount in terms of a rate or percentage that you have to pay back on an amount borrowed

Revolving credit is...

• a type of credit that can be used repeatedly up to a certain limit as long as the account is open and payments are made on time.

• a type of credit that can be used only once up to a certain limit and must be closed immediately after all payments are due

• a round device that holds credit cards and spins, making it easy to shuffle through all your credit cards quickly

• a spinning door with money in it

The maximum amount you may borrow on a credit card is known as:

• creditworthiness

• credit report

• credit limit

• variable rate of credit

You should avoid Payday Loans if at all possible,

• True

• False

Credit (a loan) not backed by collateral

• Car Loan

• Secured Loan

• Unsecured Loan

• Deferred Loan

What is a line of credit extended to individuals or businesses who may use it as often as desired up to a specific dollar limit?

• Fixed Rate

• Variable Rate

• Installment Loan

• Revolving Credit

What is an advantage of a secured loan

• No collateral is needed

• lower interest rates

• Extra time is given to pay back the loan

• No interest for the first 90 days

This is when the interest rate will remain the same for the life of the loan

• Variable Rate

• Floating Rate

• Fixed Rate

• Simple Rate

What is a loan term?

• The amount of time a revolving line of credit can be open

• The period in which the loan is to be repaid, each payment broken down into individual installments

• The payment of income to a savings account in regular payments over a set period of time.

• Specifically related to the black market for human organs, and typically meant as the length of time one's kidney will be used for other purposes

What is the principal of the loan?

• the initial amount of the loan

• the cost of borrowing the loan

• a manager in charge of the loan

• the period of time you take out the loan for