Loans and Credit Review

A legal process that relieves debtors of the responsibility of paying their debts or protects them while they try to repay

• Credit Utilization Rate

• Credit

• High Rate Method

• Bankruptcy

The interest rate a credit card user will be charged on the unpaid portion of their balance

• High Rate Method

• Credit

• Credit Bureau

• Annual Percentage Rate (APR)

An agreement in which a borrower receives something of value now and agrees to repay the lender in the future, generally with interest

• Credit Score

• Credit

• Annual Percentage Rate (APR)

• Credit Bureau

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

• Credit Score

• High Rate Method

• Bankruptcy

• Credit History

A method of debt repayment whereby the borrower prioritizes paying down debts with the smallest balances first

• Credit

• Credit Score

• Debt Snowball Method

• FICO Score

A term used to describe someone with little to no credit history

• High Rate Method

• Annual Percentage Rate (APR)

• Bankruptcy

• Thin File

What is one advantage of having a credit card?

• It prevents you from spending more than you earn.
• It allows you to make purchases without carrying lots of cash.
• It encourages you to budget your money wisely.
• It helps you pay off debts that you may have.

How do credit card companies make money?

• By charging late fees and interest to their customers.
• By making you pay an extra dollar on every purchase.
• By charging late fees and interest to stores and other businesses.
• By earning interest on the money they have saved up.

The more credit cards you have, the better.

• True

• False

All of the following are dangers of credit, EXCEPT:

• Overspending
• Can be dangerous in tough economic times
• Can increase your financial options
• Can be expensive