Credit Usage Unit Test

Your roommate got her first credit card statement and notices a term she doesn't understand. What does APR stand for in financial terms?

• Annual Payment Rate

• Annual Profit Rate

• Annual Principal Rate

• Annual Percentage Rate

Michael is unable to repay his debts due to financial difficulties. What is this process called?

• Bankruptcy

• Collateral

• Credit

• Credit Counseling

Mason needs to buy a new laptop. He doesn't have enough money saved, so he decides to enter into a contract agreement where he receives money with the obligation to repay later. What is this agreement called?

• Credit

• Bankruptcy

• Collateral

• Debt

William is applying for a loan and the bank asks for a detailed breakdown of his credit history. What is this document called?

• Credit Bureau

• Credit Counseling

• Credit Score

• Credit Report

You borrowed money from your sister to buy a new cell phone. What is the money you owe called?

• Credit

• Debt

• Down Payment

• Collateral

You got approved for a loan to buy a new car. What document describes the terms and conditions of the loan?

• Credit Score

• Credit Disclosure Agreement

• Collateral Agreement

• Credit Report

Mia needs to pay a portion of the purchase price upfront for the new car she is about to buy. What is this payment called?

• Credit

• Collateral

• Down Payment

• Debt

Zoe is reviewing her credit card statement and notices the term 'grace period'. What is a grace period?

• The time before a loan is approved

• The number of days a consumer has to pay their balance in full before incurring any interest or penalty fees

• The period during which a loan is interest-free

• The time after a loan is repaid

Jeff is considering renting an apartment. What is a lease?

• A financial aid for students

• A legal contract that outlines the terms, conditions, and rent for the use of an asset

• A type of unsecured loan

• A government grant

Why is it important to have a good credit score?

• It determines your eligibility for student loans

• It affects your ability to rent an apartment, buy a car, or get a mortgage

• It increases the amount of money you can borrow from friends

• It decreases the amount of taxes you owe