Understanding Borrowing

How can you check how much money you have in your current account?

• Via an ATM/Cashpoint

• Visiting your bank branch

• Logging on to online banking

• Visiting your bank branch

Which term describes your bank account if the balance drops below £0?

• Under-balance

• Over-balance

• Overdraft

• Bank draft

Which of the following forms of borrowing do you think has the highest risk associated with it?

• Loan shark

• Mortgage

• Credit card

• Payday loan

What does the term Annual Percentage Rate (APR) mean in relation to a credit card?

• The minimum you must repay on the total amount you owe

• The percentage of your annual income that you must use to repay debts

• The interest rate you pay for borrowing money

• The ammount you can borrow over a year without paying interest

Why is your credit rating important?

• Lenders will consider your rating when deciding on whether to lend money

• It can impact on the interest rates lenders set for you

• Your rating can affect how likely lenders are to give you a mortgage.

• It lasts for six years

Which of the following could have a negative impact on your credit rating?

• Having a credit card

• Paying your mobile phone bill by Direct Debit

• Living at the same address for a long time

• Missed payments on a credit card

Which of these is the most important bill to prioritise if you are in financial difficulties (pay first)?

• Council tax

• Broadband - phone/internet

• Water

• Broadband - phone/internet

How much is an annual colour TV licence to watch live or recorded TV, or use BBC iPlayer?

• Under £50

• Between £50 and £100

• Between £100 and £200

• Over £200