Practice questions about credit

What is credit?

• Money you have in your pocket

• The ability to buy now and pay later

• Something you can only use at stores

• A type of cash payment

Which of these is an advantage of using credit?

• You always pay less for items

• You can buy expensive items in smaller payments

• You never have to pay interest

• The bank gives you free money

What is a credit card?

• A card that takes money from your account right away

• A type of ID card

• A card that lets you borrow money to buy things

• A gift card from the store

What is interest?

• Extra money you must pay when borrowing

• Free money from the bank

• A type of savings account

• A reward for using credit

Which statement about debit cards is true?

• They are the same as credit cards

• You can pay later with them

• Money comes out of your account right away

• They always charge interest

What is a fixed interest rate?

• A rate that changes every month

• A rate that stays the same

• A rate only used for credit cards

• A rate that goes up every year

What does APR mean?

• A Perfect Rate

• Annual Percentage Rate

• Always Pay Right

• Automatic Payment Return

What happens when you use a credit card?

• You win prizes

• You get free money

• You borrow money you need to pay back

• The item becomes free

What is revolving credit?

• Credit that you can only use once

• Credit that you can use over and over

• Credit that never needs to be paid back

• Credit that has no limit

What is installment credit?

• Credit with no fixed payments

• Credit that never ends

• Credit with fixed payments over time

• Credit without interest