Credit and Teen Finance Quiz

What is a credit card?

• A credit card is a type of debit card that allows the cardholder to withdraw cash from an ATM.

• A credit card is a form of identification used to access personal bank accounts.

• A credit card is a prepaid card that can only be used for online purchases.

• A credit card is a plastic card issued by a financial institution that allows the cardholder to borrow funds to make purchases and pay them back later with interest.

What is the minimum age requirement to apply for a credit card?

• 18

• 25

• 21

• 16

What is a credit score?

• A credit score is a numerical representation of an individual's creditworthiness.

• A credit score is a number that represents a person's popularity among their peers.

• A credit score is a rating given to individuals based on their social media activity.

• A credit score is a measure of how much money a person has in their bank account.

What is the purpose of a credit limit?

• To determine the interest rate on a loan.

• To set a maximum amount of credit that a borrower can use.

• To track the borrower's credit history.

• To provide a discount on purchases made with credit.

What is an annual percentage rate (APR)?

• The annual percentage rate (APR) is the interest rate charged on a loan or credit card on an annual basis.

• The annual percentage rate (APR) is the interest rate charged on a loan or credit card on a weekly basis.

• The annual percentage rate (APR) is the interest rate charged on a loan or credit card on a daily basis.

• The annual percentage rate (APR) is the interest rate charged on a loan or credit card on a monthly basis.

What is a credit utilization ratio?

• Credit utilization ratio is the number of credit cards you have.

• Credit utilization ratio is the percentage of your available credit that you are currently using.

• Credit utilization ratio is the total amount of credit you have available.

• Credit utilization ratio is the interest rate on your credit cards.

What is the purpose of a co-signer on a credit card application?

• The purpose of a co-signer on a credit card application is to provide additional assurance to the credit card issuer that the debt will be repaid.

• The purpose of a co-signer on a credit card application is to increase the interest rate on the credit card.

• The purpose of a co-signer on a credit card application is to earn rewards and cashback on the credit card.

• The purpose of a co-signer on a credit card application is to share the credit limit with the primary cardholder.

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

• A debit card allows you to spend money from your own funds, while a credit card allows you to borrow money up to a limit.

• A debit card can only be used for online purchases, while a credit card can only be used for in-person purchases.

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

• A debit card allows you to spend money from someone else's funds, while a credit card allows you to borrow money up to a limit.

What is the purpose of a budget when it comes to teen finance?

• The purpose of a budget when it comes to teen finance is to make them dependent on their parents for money.

• The purpose of a budget when it comes to teen finance is to help them manage their money effectively.

• The purpose of a budget when it comes to teen finance is to restrict their spending.

• The purpose of a budget when it comes to teen finance is to limit their financial freedom.

What is the importance of building good credit as a teenager?

• To establish a positive financial history and improve future financial opportunities.

• To have access to more credit cards and loans.

• To increase the chances of getting approved for a rental property.

• To impress friends and family with a high credit score.