Understanding Credit and Debt Management

What is the principal in terms of a line of credit?

• The interest rate charged on the borrowed amount

• The amount you owe before interest is added

• The total amount paid over the term

• The monthly payment amount

Which of the following is a benefit of using a credit card responsibly?

• Excessive debt

• A poor credit history

• Convenience

• Long-term financial liability

What does APR stand for in the context of credit cards?

• Annual Payment Rate

• Annual Percentage Rate

• Annual Penalty Rate

• Annual Principal Rate

What is the purpose of a credit report?

• To show your current bank balance

• To reflect the extent of your credit and payment history

• To calculate your monthly interest

• To determine your annual income

Which of the following is a credit card "Don't"?

• Pay your bills on time

• Use your card for major purchases

• Check monthly statements

• Notify your bank if your card is lost

What is a penalty rate in the context of credit cards?

• A fee for using the card internationally

• A higher interest rate charged for late payments or exceeding the credit limit

• A discount rate for early payments

• A fixed rate for all purchases

What is the minimum monthly payment on a credit card?

• The total balance due

• The smallest payment you can make and still be in good standing

• The interest charged for the month

• The annual fee divided by 12

How long does negative information remain on your credit report?

• 3 years

• 5 years

• 7 years

• 10 years

What is a low interest teaser rate?

• A permanent low interest rate

• A time-limited low interest rate that increases later

• A rate applied only to cash advances

• A rate for balance transfers only

Which of the following is a credit card "Do"?

• Skip payments occasionally

• Use one credit card to pay another

• Pay your bill in full each month

• Give in to opportunities to raise your credit limit