Unit 4 & 5 Review (Saving and Credit)

What is a credit card?

• A link to your checking account
• A type of interest
• A way to loan money from the bank

• A type of savings account

What is the main difference between a credit card and a debit card?

• Credit cards can access your checking account while debit cards cannot

• Credit cards are linked to a bank account while debit cards are not

• Credit cards allow you to spend money you don't have while debit cards take money right out of your account

• Debit cards have higher interest rates than credit cards

What is a credit score?

• The amount of money you owe on your credit card

• The maximum limit you are able to spend on your credit card

• A numerical representation of your creditworthiness

• The interest rate charged on your credit card

Why is saving important?

• To buy unnecessary items

• To have money available for emergencies

• To impress friends and family

• To pay off credit card debt

How can you build strong saving habits?

• By spending all your money each month

• By setting aside a portion of your income regularly

• By borrowing money from friends

• By using credit cards for all your purchases

What is the main difference between a savings account and a checking account?

• Saving accounts have higher interest rates than checking accounts

• Saving accounts are used for short term goals while checking accounts are used for long-term goals

• Saving accounts allow unlimited withdrawals while checking accounts have limits

• Saving accounts require a minimum balance while checking accounts do not

What is compound interest?

• The interest earned only on the initial deposit.

• The interest earned on the principal and the previously earned interest

• The interest paid by the bank for using their services

• The interest charged on your credit card

When you save money in a bank...

• the bank is lending your money to others.

• the bank keeps your money safe without using it.

• the bank returns your money with little to no interest.

• the bank uses your money to payy of its debts.

Which of the following is an example of a short-term financial goal?

• Saving for retirement

• Buying a car

• Paying off a mortgage

• Saving for a pair of shoes

Which of the following is an example of a long-term financial goal?

• Saving for a vacation next summer

• Paying off a credit card bill next month

• Buying a new smartphone next week

• Saving for retirement in 30 years