Lesson 7 Quiz: About Credit

A disadvantage of using credit is impulse buying.

• TRUE

• FALSE

Capital refers to a person’s assets.

• TRUE

• FALSE

A steady employment record helps a person’s credit history.

• TRUE

• FALSE

Installment credit usually allows a person to make additional purchases on an account

• TRUE

• FALSE

Using the 20-10 rule, a person making $40,000 a year after taxes should have no more than $8,000 of outstanding debt.

• TRUE

• FALSE

A common advantage of using credit is:

• less impulse buying

• lower cost for items purchased

• ability to obtain needed items now

• lower chance of overspending

A person’s regular income is referred to as:

• character

• capital

• collateral

• capacity

To build a credit history, a person could:

• establish a steady employment record

• file his or her federal income taxes on time

• use an ATM several times a month

• request to view her or his credit file

Utility companies and medical service organizations commonly offer ______ credit.

• revolving

• single-payment

• installment

• retail

Using the 20-10 rule, a person earning $1,500 a month should not have monthly credit payments that exceed:

• $300

• $150

• $20

• $30