Unit 3: CFA 3 (Standard 6)

What is credit?

• Money that is given as a gift

• The ability to borrow money or access goods or services with the understanding that you’ll pay later

• A type of investment account

• A government tax

Tags

GA.SS.12.SSEPF6

What is a common cost associated with using credit?

• Earning interest on your savings

• Paying interest on borrowed money

• Receiving cash back on purchases

• Getting discounts on all items

Tags

GA.SS.12.SSEPF6

What does a credit score represent?

• The amount of money in your bank account

• Your history of repaying borrowed money

• The number of credit cards you own

• The total amount you have borrowed

Tags

GA.SS.12.SSEPF6

Which of the following is an example of using credit?

• Paying cash for groceries

• Taking out a loan to buy a car

• Depositing money into a savings account

• Receiving a paycheck

Tags

GA.SS.12.SSEPF6

If you pay only the minimum payment on your credit card each month, what is likely to happen?

• You will pay off your balance quickly

• You will pay more in interest over time

• Your credit score will automatically increase

• You will not be charged any interest

Tags

GA.SS.12.SSEPF6

How can using credit responsibly benefit you in the future?

• It can help you build a good credit history

• It guarantees you will never have debt

• It eliminates the need for a budget

• It increases your monthly expenses

Tags

GA.SS.12.SSEPF6

Which action could help you avoid paying high interest on credit card debt?

• Making only the minimum payment each month

• Paying your full balance each month

• Ignoring your credit card statements

• Using your credit card for every purchase

Tags

GA.SS.12.SSEPF6

Which of the following is a potential risk of using credit excessively?

• Improved credit score

• Accumulating unmanageable debt

• Lower interest rates

• Increased savings

Tags

GA.SS.12.SSEPF6

You are considering taking out a student loan to pay for college. What is a potential long-term cost you should evaluate before borrowing?

• The amount of time it takes to apply

• The total interest you will pay over the life of the loan

• The color of your diploma

• The number of classes you will take

Tags

GA.SS.12.SSEPF6

To build a good credit history, you should: open as much credit as possible quickly, use the maximum credit allowed on all your credit cards, pay on time and as much of your balance as possible, all of these

• open as much credit as possible quickly

• use the maximum credit allowed on all your credit cards

• pay on time and as much of your balance as possible

• all of these