Review for PF Unit 6 - Loans - Quiz

What is a Credit Report?

• A report on every item you've ever bought throughout your entire life
• A history of your responsibility with credit for the last 7-10 years
• Your score you receive after taking a credit test
• Your credit score

Which best describes how a credit card works?

• The credit card company extends you a line of credit. You then pay a small percentage of the cost of those purchases in one annual payment.
• The credit card company extends you a line of credit. You purchase "stuff" and the purchase gets directly paid with funds in your checking account.
• The credit card company extends you a line of credit. This is free money that you can use to purchase the "stuff" that you need.
• The credit card company extends you a line of credit. You purchase "stuff" and then have the choice to pay the balance in full or a minimum payment each month.

Why should you read the Schumer Box?

• It tells you how much you owe each month on your credit card bill
• It lets you know when you’ve gone over your credit limit
• It lets you keep track of how much money you have left in your checking account
• It tells you the terms of your credit card, including APR and fees

What is the advantage of paying your credit card balance in full each month?

• You avoid paying any interest and fees.
• You will incur only a small "paid in full" fee on your next credit card statement.
• You pay only a small amount of interest.
• You have less of your credit limit available, therefore, less temptation to spend.

If you decide to take out a large car loan, the bank you are borrowing from might require you to put up some collateral. Why?

• The bank wants you to make a large down payment
• It’s a small loan and the bank has no concerns that you’ll pay it back
• If you fail to make payments, the bank can seize your asset or property
• This way, the bank can keep track of your payments and let you know when you’re late or missed a payment

If you miss a credit payment, it will show up on a credit check or inquiry five years later.

• True
• False

If you miss a credit payment, it will show up on a credit check or inquiry five years later.

(a)  

• True
• False

What is an outstanding balance on a credit card or other loan?

• The amount you paid in your minimum payment
• The amount you spent in total
• The amount you still owe after you have made your most recent payment
• The amount you still have in your line of credit

All of the following are credit card companies EXCEPT:

• ViSA
• AMERICAN EXPRESS
• US BANK
• MASTERCARD

All of the following are credit card companies EXCEPT:

(a)  

• ViSA
• AMERICAN EXPRESS
• US BANK
• MASTERCARD