Credit and Debt Review

Draw a reason why it may be beneficial for a young adult to establish a credit score.

Which is more important, to establish a high credit score, or to limit your debt as much as possible/be debt free?

• Establish a high credit score

• Limit your debt as much as possible/be debt free

Which of the following statements comparing credit and debit cards is TRUE?

• Far more businesses accept credit cards than debit cards 

• Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard 

• Credit card companies provide you with a monthly statement, while debit cards do not 

• With debit cards, you spend your own money, but with credit cards, you're getting a loan that you need to pay back later

Which payment option could have interest charged to you?

• Cash

• Check

• Debit Card

• Credit Card

How can a cardholder avoid paying interest on a credit card?

• Do not pay anything

• Pay the minimum payment after its due date

• Pay the minimum balance every month

•  Pay the balance in full every month

The annual percentage rate on a credit card determines

• the amount of interest you are charged

• the amount your credit limit can go up within a year

• how many credit cards you own

• none of the above

Which of the following can increase your credit card's APR

• Paying the minimum

• Missing a credit card payment

• Paying off the full balance

• Cashing in on rewards points

What is the primary purpose of a credit score in financial management?

• To determine eligibility for loans

• To calculate annual taxes

• To set monthly budgets

• To track daily expenses

Which of the following is a benefit of undergoing a debt review process?

• Increased interest rates

• Improved credit score

• Protection from legal action by creditors

• Immediate loan approval

What is a common consequence of failing to manage credit effectively?

• Increased savings

• Higher interest rates on loans

• Lower insurance premiums

• Improved credit score