Introduction to credit

What does it mean to use credit?

• Taking money without permission

• Borrowing money to pay for something, and later paying that loan back, with interest

• Borrowing money without paying that loan back

Credit cards are a form of which of the following?

• Loan

• Gift

• Insurance

If you do not pay your credit card in full you may be charged which of the following?

• A one time fee

• Interest

• An overdraft fee

A lower interest rate means you pay ________ money. A higher interest rate means you pay __________ money.

• less, more

• more, less

Debit and credit cards work exactly the same way.

• True

• False

What happens when you use your debit card?

• You pull money directly from your savings account

• You pull money directly from your checking account

• You are borrowing money from your bank to make a purchase

• You are borrowing an item/service now with the promise to pay later

A key difference between a debit and credit card is....

• You can build a credit score when using a credit card responsibly, not with a debit card

• You can build a credit score when using a debit card responsibly, not with a credit card.

Which of the following is true about store credit cards?

• You are only able to use the credit card for that store in particular

• You are able to use the credit card for that store and different types of stores

• You are able to use the credit card for any store or restaurant.

Which of the following would someone most likely use a credit card to pay for?

• Car

• House

• Groceries

• Education

Which of the following is something that a person would most likely use a loan to pay for?

• Gas

• Groceries

• Haircut

• Car