Credit and Debt Review

A three-digit number (ranging from 300-850) based on an individual's credit history

• Credit Report

• Credit Score

• Credit Card

• Credit Check

Why would credit card companies prefer that their cardholders make the minimum monthly payment every month rather than paying their total balance in full?

• This is required by federal law for tax purposes 

• This allows the card holder to pay their bill quickly and close the card when they’re ready

• This enables the credit card company to make more money off the interest being paid

• This helps cardholders develop financial independence

Write the order in which you would pay off these debts using the debt snowball method

Write the order in which you would pay off these debts using the debt avalanche method

Three consumers each purchase the same computer for $1,000. They each use the same type of credit card, with all the same policies and conditions, to purchase the computers. The credit card terms provide for an annual percentage rate (APR) of 18%. Consumer 1 pays the minimum payment each month until, after two years, the balance is paid off. Consumer 2 pays no money the first three months, but then pays the entire amount off in the fourth month. Consumer 3 pays off the entire balance in the first month.
Which statement best describes the results of the consumers’ actions? MCM.3.3

_________ is a measure of how good you are at repaying your debts

• Credit Score

• Credit Grade

• Credit Card

• Banking Score

The risk of ending up with the equivalent of a never-ending loan is one of the disadvantages of using:

• checking accounts

• savings accounts

• credit cards

• debit cards

Which of the following would show up on a credit report?

• Salary of your current job

• Credit card payment history

The cost of credit expressed as a yearly interest rate is known as:

• Annual Percentage Rate (APR)

• Annual Fee

• Penalty APR

• Introductory Rate

A __________________ remains on a person’s credit rating for at least seven years, making it almost impossible to get a loan.

• charge

• deficit

• warranty

• bankruptcy