Quiz about Terminology Review 5 - Types of Credit

Question 1

What is an Adjustable-Rate Mortgage (ARM)?

Accepted Answer

A mortgage with an interest rate that changes periodically

Answer

A mortgage with a fixed interest rate for the entire term

Answer

A loan from a retirement savings account

Answer

A credit card with a fixed annual fee

Question 2

What is a 401(k) Loan?

Accepted Answer

A loan from a retirement savings account

Answer

A loan with a fixed interest rate

Answer

A type of credit card fee

Answer

A method of paying off debt in installments

Question 3

What does Amortization refer to?

Accepted Answer

Paying off debt over time in equal installments

Answer

A yearly fee for using a credit card

Answer

The act of transferring debt between credit cards

Answer

A service allowing cash withdrawal from credit cards

Question 4

What is an Annual Fee in terms of credit cards?

Accepted Answer

A yearly fee for having a specific credit card

Answer

A fee for transferring balances

Answer

A fee for withdrawing cash from a credit card

Answer

A fee for using another person's credit card

Question 5

What does Annual Percentage Rate (APR) represent?

Accepted Answer

The cost of borrowing money each year as a percentage

Answer

The fee for transferring a balance

Answer

The interest rate on a savings account

Answer

The fee for using a credit card abroad

Question 6

Who is an Authorized User on a credit card?

Accepted Answer

A person who can use the card but isn't responsible for the bill

Answer

A person legally responsible for paying the credit card bill

Answer

A person who can transfer balances between cards

Answer

A person who can withdraw cash from the card

Question 7

What is a Balance Transfer?

Accepted Answer

The act of transferring debt from one credit card to another

Answer

A fee for using a credit card

Answer

A method of paying off debt in installments

Answer

A service allowing cash withdrawal from credit cards

Question 8

What is a Cash Advance?

Accepted Answer

A service allowing cash withdrawal from a credit card

Answer

A fee for transferring a balance

Answer

A yearly fee for having a specific credit card

Answer

A loan from a retirement savings account

Question 9

What is a charge card?

Accepted Answer

A special type of credit card with no interest, requiring full monthly payment

Answer

A card that allows you to make purchases with borrowed money

Answer

A card that offers reward points for purchases

Answer

A card that combines multiple loans into one

Question 10

What is collateral in the context of loans?

Accepted Answer

Something valuable that can be taken if a loan is not repaid

Answer

A type of credit card with no interest

Answer

A legal document outlining credit card terms

Answer

A nonprofit financial institution owned by its members

Question 11

What does a consolidation loan do?

Accepted Answer

Combines two or more education loans into a single loan

Answer

Allows you to make purchases with borrowed money

Answer

Provides a small percentage of expenditures as cash

Answer

Outlines the terms and conditions for using a credit card

Question 12

Who is a cosigner?

Accepted Answer

Someone who agrees to take responsibility for a person's debt if they cannot repay it

Answer

A person who funds a project by raising small amounts of money

Answer

A lender who provides loans with collateral

Answer

A borrower who consolidates multiple loans

Question 13

What is a credit card agreement?

Accepted Answer

A legal document outlining the terms and conditions for using a credit card

Answer

A document that combines multiple loans

Answer

A card that allows purchases with borrowed money

Answer

A nonprofit financial institution owned by its members

Question 14

What is the credit limit?

Accepted Answer

The maximum amount that may be borrowed on a credit card

Answer

The minimum payment required each month

Answer

The interest rate applied to a credit card balance

Answer

The total amount of rewards earned on a credit card

Question 15

What is a credit union?

Accepted Answer

A nonprofit financial institution owned by its members

Answer

A type of credit card with no interest

Answer

A document outlining credit card terms

Answer

A practice of funding projects via the Internet

Question 16

What is crowdfunding?

Accepted Answer

A practice of funding a project by raising small amounts of money from many people

Answer

A type of loan that combines multiple debts

Answer

A card that allows purchases with borrowed money

Answer

A legal document for credit card terms

Question 17

What is a card that is directly connected to your checking account, enabling ATM transactions and purchases without using cash or writing a check?

Accepted Answer

Debit Card

Answer

Credit Card

Answer

Prepaid Card

Answer

Gift Card

Question 18

What is the term for a long-term failure to repay a loan according to the agreed terms, which negatively impacts the borrower's credit score?

Accepted Answer

Default

Answer

Bankruptcy

Answer

Foreclosure

Answer

Repossession

Question 19

Which type of loan is available to graduate or professional students and eligible parents of dependent undergraduate students to help pay for education costs?

Accepted Answer

Direct Plus Loans

Answer

Direct Subsidized Loan

Answer

Direct Unsubsidized Loan

Answer

Perkins Loan

Question 20

What is a federal student loan available to undergraduates where the government pays the interest as long as the student is in school at least part-time?

Accepted Answer

Direct Subsidized Loan

Answer

Direct Unsubsidized Loan

Answer

Private Loan

Answer

Parent PLUS Loan

Question 21

Which loan requires the student to pay interest during school or have it added to the principal amount?

Accepted Answer

Direct Unsubsidized Loan

Answer

Direct Subsidized Loan

Answer

Perkins Loan

Answer

Stafford Loan

Question 22

What is a partial payment made in cash at the beginning of a purchase, with the remaining balance due later or financed?

Accepted Answer

Down Payment

Answer

Installment

Answer

Deposit

Answer

Advance Payment

Question 23

What type of loan has an interest rate that does not change over the life of the loan?

Accepted Answer

Fixed-Rate Loan

Answer

Variable-Rate Loan

Answer

Adjustable-Rate Loan

Answer

Interest-Only Loan

Question 24

What is a mortgage with a fixed interest rate for the entire term as long as payments are made on time?

Accepted Answer

Fixed-Rate Mortgage

Answer

Adjustable-Rate Mortgage

Answer

Balloon Mortgage

Answer

Interest-Only Mortgage

Question 25

What is the term for the number of days between a borrower's statement date and when payment is due, often without accruing interest?

Accepted Answer

Grace Period

Answer

Billing Cycle

Answer

Payment Window

Answer

Interest-Free Period

Question 26

What is a Home-Equity Loan?

Accepted Answer

A consumer loan extended to a homeowner that uses the borrower's home as collateral

Answer

A loan used to finance a specific purchase for a specific amount of time

Answer

A fee charged if your payment is received after the due date

Answer

An agreement where you are credited with a fixed amount of money for a fixed period of time

Question 27

What is an Installment Loan?

Accepted Answer

A loan used to finance a specific purchase for a specific amount of time, during which regular payments pay the accrued interest and a portion of the principal

Answer

A bank or credit account that is shared between two or more people

Answer

The amount you owe as the cost of borrowing money

Answer

A contract by which one party gives property to another for a specified time

Question 28

What does Interest refer to?

Accepted Answer

The amount you owe as the cost of borrowing money

Answer

The rate charged for borrowing money usually expressed as a percent of the amount borrowed

Answer

A fee charged if your payment is received after the due date

Answer

A contract by which one party gives property to another for a specified time

Question 29

What is an Introductory APR?

Accepted Answer

A typically low rate charged during the introductory period after a credit account is opened

Answer

A fee charged if your payment is received after the due date

Answer

An agreement where you are credited with a fixed amount of money for a fixed period of time

Answer

A bank or credit account that is shared between two or more people

Question 30

What is a Joint Account?

Accepted Answer

A bank or credit account that is shared between two or more people

Answer

A loan used to finance a specific purchase for a specific amount of time

Answer

The amount you owe as the cost of borrowing money

Answer

A contract by which one party gives property to another for a specified time

Question 31

What is a Lease?

Accepted Answer

A contract by which one party gives property to another for a specified time, usually in return for a periodic payment

Answer

A fee charged if your payment is received after the due date

Answer

An agreement where you are credited with a fixed amount of money for a fixed period of time

Answer

A consumer loan extended to a homeowner that uses the borrower's home as collateral

Question 32

What is a Loan?

Accepted Answer

An agreement where you are credited with a fixed amount of money for a fixed period of time, usually with interest

Answer

A fee charged if your payment is received after the due date

Answer

A bank or credit account that is shared between two or more people

Answer

The amount you owe as the cost of borrowing money

Question 33

What is the smallest amount a credit card holder must pay during a billing cycle to remain in good standing with the lender?

Accepted Answer

Minimum Payment

Answer

Micro Credit

Answer

Mortgage

Answer

Net Price

Question 34

What is a method of lending very small sums to individuals, typically in developing countries, to start or expand a small business?

Accepted Answer

Micro Credit

Answer

Mortgage

Answer

Payday Loan

Answer

Personal Loan

Question 35

What type of loan is taken by individuals and businesses to make real estate purchases without paying the entire value of the purchase up front?

Accepted Answer

Mortgage

Answer

Personal Loan

Answer

Payday Loan

Answer

Peer-To-Peer Lending

Question 36

What is the actual cost a student pays to attend a school, calculated as the sticker price minus grants and scholarships?

Accepted Answer

Net Price

Answer

Principal

Answer

Penalty APR

Answer

Overdraft Protection

Question 37

What is a loan banks offer to their customers when they try to withdraw more funds than they have in their account, usually for a fee and with interest?

Accepted Answer

Overdraft Protection

Answer

Payday Loan

Answer

Prepaid Debit Card

Answer

Personal Loan

Question 38

What is a small loan, offered through a business, lent at a high interest rate, and meant to be paid as soon as you receive your next paycheck?

Accepted Answer

Payday Loan

Answer

Personal Loan

Answer

Mortgage

Answer

Micro Credit

Question 39

What is a method of debt financing that enables individuals to borrow and lend money without the use of a financial institution as an intermediary?

Accepted Answer

Peer-To-Peer Lending

Answer

Prepaid Debit Card

Answer

Penalty APR

Answer

Principal

Question 40

What is a higher interest rate triggered by being late with or missing a credit card payment?

Accepted Answer

Penalty APR

Answer

Net Price

Answer

Principal

Answer

Overdraft Protection

Question 41

What is a card that is loaded with a specific cash amount before you use it, and is not linked to a bank or credit union account?

Accepted Answer

Prepaid Debit Card

Answer

Personal Loan

Answer

Payday Loan

Answer

Micro Credit

Question 42

What is the original amount of money borrowed, separate from interest or fees?

Accepted Answer

Principal

Answer

Penalty APR

Answer

Net Price

Answer

Mortgage

Question 43

What is a type of loan issued by a bank, credit union or online lender that you pay back in fixed monthly payments, typically over two to seven years?

Accepted Answer

Personal Loan

Answer

Payday Loan

Answer

Mortgage

Answer

Micro Credit

Question 44

What is a Point of Sale (POS)?

Accepted Answer

A place where a customer makes the payment for goods or services

Answer

A type of loan for small businesses

Answer

A monthly record of account transactions

Answer

A type of credit card with collateral

Question 45

What is Revolving Credit?

Accepted Answer

An open line of credit for any purchases under a limit

Answer

A loan with a fixed interest rate

Answer

A type of secured debt

Answer

A monthly statement of transactions

Question 46

What is a Schumer Box?

Accepted Answer

A standard table in a credit card agreement showing rates and fees

Answer

A type of secured credit card

Answer

A loan for small businesses

Answer

A record of account transactions

Question 47

What is a Secured Credit Card?

Accepted Answer

A card that requires collateral as a credit limit

Answer

A card with no collateral required

Answer

A loan for operating a small business

Answer

A type of unsecured debt

Question 48

What is Secured Debt?

Accepted Answer

Debt tied to a specific tangible asset

Answer

Debt not tied to any asset

Answer

A loan with a variable interest rate

Answer

A monthly statement of transactions

Question 49

What is a Small Business Loan?

Accepted Answer

A loan used to fund expenses for a small business

Answer

A loan for personal expenses

Answer

A type of unsecured debt

Answer

A credit card with collateral

Question 50

What is a Statement in financial terms?

Accepted Answer

A monthly record of account transactions

Answer

A loan agreement

Answer

A type of secured debt

Answer

A credit card agreement

Question 51

What does the Term refer to in a loan?

Accepted Answer

The amount of time to repay the loan

Answer

The interest rate of the loan

Answer

The collateral required for the loan

Answer

The monthly payment amount

Question 52

What is Unsecured Debt?

Accepted Answer

Debt not tied to any specific asset

Answer

Debt tied to a specific asset

Answer

A type of secured credit card

Answer

A loan for small businesses

Question 53

What is a Variable-Rate Loan?

Accepted Answer

A loan with an interest rate that can change

Answer

A loan with a fixed interest rate

Answer

A type of secured debt

Answer

A monthly statement of transactions

Terminology Review 5 - Types of Credit

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