Credit and Debt Quiz

What is the term used for people who lend money or provide credit to others?

• Debtors

• Borrowers

• Creditors

• Consumers

What is the additional money owed to the creditor for the privilege of using the credit called?

• Principal

• Finance charge

• Collateral

• Default

What is the term for credit that does not require the consumer to pledge property in order to obtain it?

• Secured credit

• Unsecured credit

• Collateral

• Default

What must a consumer put up to obtain secured credit?

• Finance charge

• Interest

• Collateral

• Default

What is the term for the percentage cost of credit on a yearly basis?

• Annual percentage rate (APR)

• Finance charge

• Interest rate

• Credit limit

What should you find out when choosing a credit card to maintain?

• The credit limit

• The annual fee

• The minimum payment

• The billing cycle

What is one reason some car rental companies will not rent to people without a major credit card?

• They prefer cash payments.

• They want to avoid instant loans.

• They require a credit history.

• They offer discounts for credit card users.

What is a common problem associated with credit card use mentioned in the text?

• Low interest rates on unpaid balances.

• Easy access to large loans.

• Difficulty in paying the balance on time.

• High rewards and cashback offers.

What is a general rule for determining if a consumer is using too much credit?

• Spending more than 10 percent of their take-home salary on debts.

• Spending more than 20 percent of their take-home salary on debts.

• Spending more than 30 percent of their take-home salary on debts.

• Spending more than 40 percent of their take-home salary on debts.