Banking, Credit, and Debt

Match the term with its definition.

• Credit Card

• Allows you to borrow money up to a limit.

• Checking Account

• An account for everyday transactions.

• Credit Score

• Cost of borrowing money or the earnings on savings.

• Interest

• Three-digit number indicating creditworthiness.

Match the term with its definition.

• Debit Card

• Spends money directly from your bank
  account.

• Savings Account

• An account designed to hold money for the
  future and earn interest.

• Debt

• Borrowed money that needs to be repaid.

• Check

• A written order instructing a bank to pay someone.

A debit card allows you to spend money that you don't currently have.

• True

• False

Paying only the minimum payment on a credit card can lead to higher interest charges.

• True

• False

A good credit score can make it easier to get a loan with a lower interest rate.

• True

• False

Simple interest is calculated on the principal and any accumulated interest.

• True

• False

Writing a check requires you to sign your name.

• True

• False

Overdraft fees occur when you spend more money than you have in your savings account.

• True

• False

Which of the following is NOT a key factor that affects your credit score?

• Payment history

• Your favorite color

• Amounts owed

• Length of credit history

Which type of bank account typically offers the highest interest rate but has penalties for early withdrawal?

• Checking account

• Savings account

• Certificate of Deposit (CD)

• Debit card