NGPF Middle School Credit Quiz Ch4 - 2

What is credit?

• Ability to borrow money or obtain goods or services without payment

• Ability to borrow money or obtain goods or services before payment

• Ability to borrow money or obtain goods or services after payment

• Ability to lend money or provide goods or services before payment

What are the advantages of using credit cards?

• Convenience, rewards programs, building credit history, and fraud protection.

• Difficulty in tracking expenses, temptation to make impulsive purchases, and negative impact on credit score.

• Limited acceptance, annual fees, and potential for identity theft.

• High interest rates, overspending, and debt accumulation.

What is credit card debt?

• The amount of money owed to a bank for a loan.

• The amount of money owed to a utility company for monthly bills.

• The amount of money owed to a landlord for rent.

• The amount of money owed to a credit card company for purchases made using the credit card.

How does credit card debt affect your credit score?

• Credit card debt only affects your credit score if it is extremely high.

• Credit card debt can positively affect your credit score.

• Credit card debt can negatively affect your credit score.

• Credit card debt has no impact on your credit score.

What is the minimum payment on a credit card?

• The minimum payment on a credit card is only applicable if you have a balance on your card.

• The minimum payment on a credit card is the smallest amount of money that a credit card holder must pay each month to keep their account in good standing.

• The minimum payment on a credit card is not required, you can choose to pay any amount you want.

• The minimum payment on a credit card is the largest amount of money that a credit card holder must pay each month to keep their account in good standing.

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

• A credit card and a debit card are the same thing.

• A credit card allows you to spend money directly from your bank account, while a debit card allows you to borrow money from the bank.

• A credit card and a debit card can only be used for online purchases.

• A credit card allows you to borrow money from the bank to make purchases, while a debit card allows you to spend money directly from your bank account.

What is an interest rate?

• The interest rate is the amount of money a borrower receives when borrowing money.

• The interest rate is the fee charged by a lender for lending money.

• The interest rate is the total amount of money borrowed from a lender.

• The interest rate is the percentage charged by a lender for borrowing money.

How is credit card interest calculated?

• Credit card interest is calculated based on the average daily balance and the annual percentage rate (APR) of the card.

• Credit card interest is calculated based on the cardholder's income.

• Credit card interest is calculated based on the number of credit cards owned.

• Credit card interest is calculated based on the cardholder's credit score.

What is a good credit score?

• Between 600 and 700

• Below 500

• Above 700

• Above 800

How can you avoid credit card debt?

• Make only the minimum payment each month.

• Pay your balance in full each month.

• Use your credit card for all purchases.

• Ignore your credit card statements and bills.