5.0 Credit Unit Test REVIEW

Each of the following financial products will help you build a credit history EXCEPT...

• Secured credit card
• Debit card
• Auto loan
• Credit card

Which of the following statements below is TRUE?

• The cardholder is carrying a balance over from the last period.
• The cardholder was charged interest on her balances for the last period because she made her payment on time.
• If the cardholder makes her minimum payment of $35.00 by the due date, she will NOT be charged interest on her balances.
• If the cardholder pays $523.20 by the due date on the bill, she will pay NO interest to the credit card company.

How can you avoid paying any fees to a credit card company?

• Choose a credit card with no annual fee
• Don't make your payment pass the due date
• Don't make a payment that gets returned
• All of the above

Based on her current balance, how much credit does this cardholder have available to use?

• $0
• About $500
• About $1,600
• $2,100

22. Which of the following statements is CORRECT about secured loans?

• They are an example of a credit card
• They require collateral, in the form of assets like a car or a home, to be exchanged for the loan
• In the event of default, the borrower loses nothing except for the down payment
• They usually have higher interest rates as compared with unsecured loans

24. As a young adult, all of the following are good strategies for building credit, EXCEPT:

• Open a credit card, with your parent or guardian as a cosigner
• Open a checking account, and start using a debit card
• Become an authorized user on a credit card used by your parent or guardian
• Open and use a secured credit card

25. Which of the following statements is true about this Schumer Box?

• Depending on your creditworthiness, the APR for a borrower will always either be 8.99%, 10.99% or 12.99%
• There is an introductory APR that is valid only for 1 year, but then the permanent APR is lower than that at 8.99%.
• You will never be charged an APR higher than 14.99%
• You may be charged an APR as high as 28.99% for a late payment

Any arrangement where you get "stuff" (money, goods, services), and agree to pay for it in the future

• Balance Transfer
• Dangerous - 0%
• Credit
• Co-signer

An agreement where you are credited with a fixed amount (usually of money) for a fixed period of time, usually with interest

• Loan
• Penalty Annual Purchase Rate (APR)
• Secured Credit Card
• Example a car or a house

The percentage charged for the privilege of borrowing money

• Secured Credit card
• Secured Debt
• Schumer Box
• Interest Rate