Understanding Credit, Debit, and Debt

What is a debit card?

• A debit card allows you to spend money by withdrawing money you have deposited at the bank

• A debit card is a prepaid gift card that you can only load money onto once.

• A debit card allows you to spend as much money as you want, even if your bank account is empty.

• A debit card is a type of credit card that lets you borrow unlimited money from the bank without needing to pay it back.

Managing spending and payments when using a credit card is important because:

• It helps avoid debt and maintain a good credit score.

• It allows unlimited spending without consequences.

• It is required by law.

• It has no impact on financial health.

Responsible use of credit can affect your future financial stability by:

• Improving your credit score and access to loans

• Decreasing your savings and increasing debt

• Having no impact on financial stability

• Leading to immediate financial instability

Each month, when you pay your credit card off, what happens?

• You lower your debt and increase your credit score

• Your credit score decreases.

• The bank throws you a party

• Your credit limit decreases

What is interest______.

• Interest is extra money you pay when you borrow or extra money you get when you save

• Interest is the amount of money a bank gives you for free every month

• Interest is the money you pay to a store when you buy something.

• more frequent payments

A credit card is

• Money you get from a bank with limits

• A credit card is a special ID card that lets you enter the bank.

• A credit card is a card that only rich people are allowed to use.

• A credit card is a card that gives you free money that you never have to pay back

What is one factor that can make your credit score go up?

• A) High balances

• B) Monthly payments ON TIME

• C) More lines of credit

• D) High debt-to-income ratio

Fill in the blank: Making ______ payments on time can improve your credit score.

• monthly

• yearly

• weekly

• daily

What is one factor that can decrease your credit score?

True or False: Having too many credit cards can decrease your credit score.

• True

• False