FR 7th Grade: Personal Finance Review

When you use a debit card you

• build a credit score

• pull money directly from your bank account

• pay interest

• are borrowing money from your bank to make the purchase

Credit Scores are typically between 350 and 800

• Credit Scores are typically between 350 and 800

  
  

• Credit Scores are based only on your credit history.

  
  

• Credit Scores can tell a landlord how likely you are to pay rent

  
  

• Credit scores in the middle will cause higher interest rates on loans

  
  

In a loan, the principal is...

• the person borrowing the money

  
  

• the amount you borrow + the interest you pay.

  
  

• the same as the loan term

  
  

• the amount of money you borrow

  
  

Which response describes responsible use of credit cards?

• Using a credit card to buy anything you want, even if you can’t afford it right now.

• Paying only the minimum amount due each month so you can spend more money elsewhere.

• Using a credit card for purchases you can afford to pay off in full each month.

• Borrowing as much as possible to take advantage of the credit limit.

Which of the following is a consequence of missing a credit card payment?

• Your interest rate will be reduced.

• You will receive a reward from the credit card company.

• Your credit limit will automatically increase.

• Your credit score may decrease.

What is a key difference between a credit card and a debit card?

• Credit cards require a PIN for every transaction.

• Credit cards offer a line of credit, while debit cards use your own funds.

• Debit cards charge interest on purchases.

• Debit cards allow you to borrow money from the bank.

What happens if you exceed your credit card limit?

• You will receive a bonus from the credit card company.

• Your credit score will automatically improve.

• You may incur an over-limit fee.

• Your interest rate will decrease.

Which of the following is a benefit of having a good credit score?

• Fewer credit card offers.

• Higher interest rates on loans.

• Lower insurance premiums.

• Increased monthly expenses.

What is the purpose of a credit card statement?

• To show your credit score.

• To automatically pay your balance.

• To provide a summary of your account activity and balance.

• To offer new credit card promotions.

If you use student loans for college you...

• are unable to receive scholarships

  
  

• will not have to pay them back as long as you get good grades

  
  

• should borrow only what you need for college costs and basic needs

  
  

• pay fewer taxes and can use the unused tax money to pay off the loan