Personal Finance: Credit Chapter Review

A loan is . . .

• the amount of money paid in order to borrow money

• money given to another party in exchange for repayment + interest

• using the banks money when you get robbed

• putting money into investment accounts

Which of the following is NOT a difference between credit and debit cards?

• Credit charges interest, Debit does not

• You can dispute charges to a debit card, not a credit card

• Credit cards need to be paid off monthly, debit cards are paid instantaneously

• Paying back credit cards give you good credit history, debit cards don't give you credit history

Which types of credit involve repaying a fixed amount for a fixed number of months?

• Credit Cards

• Revolving Credit

• Installment Credit

• Credit Scores

Which of the following are examples of installment credit?

• Loans

• Credit Cards

• Variable Rate Loans

• Mortgages

What is the difference between unsecured and secured loans?

• Secured means you have a better credit score

• Unsecured means the interest rate is not going to stay the same

• Unsecured means you could lose what the loan is used for

• Secured is protected by collateral

Which of the following is a factor that can change interest rate on a loan?

• Level of Education

• Credit Score

• Where you live

• What you live in

If you get a higher loan amount, your interest rate will be ___.

• Higher

• Lower

• The same, it doesn't matter

• The bank gets to decide based on your relationship.

Tags

CCSS.7.RP.A.3

Having a co-signer on your loan will ____ your interest rate because it is ___ for the bank.

• higher; less risk

• lower; more risk

• lower; less risk

• higher; more risk

Tags

CCSS.RI.11-12.3

CCSS.RI.11-12.5

CCSS.RI.8.5

CCSS.RI.9-10.3

CCSS.RI.9-10.5

In a variable rate loan, the interest rate depends on ___.

• The bank's rates at that time.

• The stock market

• The credit score

• The index

Tags

CCSS.HSF-LE.A.1B

Which of the following is a benefit of a fixed rate loan?

• The interest rate is predictable

• The interest rate is lower

• The interest rate will change if it gets too high

• You don't have to pay it for as long.