Credit Cards Part 1

What is credit?

• A permanent transaction

• Free money

• Borrowing money, goods, and services to be paid back later

• A gift

What happens if you don't pay back credit on time?

• You get a reward

• You have to pay more than you originally borrowed

• Nothing happens

• The debt is forgiven

What is the principal?

• The interest charged

• The total amount of money borrowed

• A school administrator

• The original amount borrowed

What is interest?

• A type of credit card

• The principal amount

• A charge for borrowing money

• A reward for paying back on time

What can affect your ability to borrow money?

• Your favorite color

• Your shoe size

• Your credit report and score

• The type of phone you have

What is a credit report?

• A list of your favorite movies

• A medical record

• A summary of your financial status and history

• A report card from school

What are the two most common types of credit?

• Gift cards and coupons

• Credit cards and loans

• Savings and investments

• Cash and checks

Why is it important to use credit correctly?

• To get unlimited money

• To win a prize

• To prevent getting carried away and spiraling into debt

• To avoid paying interest

What does a lender want to know about their borrowers?

• Their favorite food

• Their credit report and financial history

• Their hobbies

• Their vacation plans

What is the true cost of borrowing?

• The time it takes to apply

• The color of your credit card

• The number of purchases you make

• Interest