Understanding Credit Quiz

Which of the following is an advantage of using credit?

• You have to carry cash

• It creates a record of purchases

• It is less convenient than writing checks

• It separates bills into multiple payments

What should you do with lost or stolen credit cards?

• Keep it a secret

• Report them promptly

• Wait a week before reporting

• Do nothing

What is one benefit of credit mentioned in the slide?

• Able to buy needed items now

• Increases the amount of cash you carry

• Makes writing checks necessary

• Separates bills into multiple payments

How does credit make managing payments easier?

• It requires multiple payments for each bill

• It consolidates bills into one payment

• It eliminates the need for any payments

• It makes payments more complicated

Which of the following is a disadvantage of using credit?

• Lower cost of items

• May require additional fees

• Easier budgeting

• Increased savings

What financial issue might arise if one loses track of spending with credit?

• Increased savings

• Financial difficulties

• Lower interest rates

• Easier budgeting

What is important to do with a credit contract?

• Ignore it

• Read and understand it

• Sign it without reading

• Ask a friend to read it

What is a potential consequence of increased impulse buying with credit?

• Lower interest rates

• Higher savings

• Financial Problems

• Easier budgeting

What does the 'Character' aspect of the 3 Cs evaluate in terms of credit?

• Your will to repay the debt

• Your income level

• Your spending habits

• Your investment portfolio

Which question is NOT typically asked to assess 'Character' in credit evaluation?

• Have you used credit before?

• Do you pay your bills on time?

• What is your favorite color?

• Can you provide character references?