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WorksheetsCredit Basics
Total questions: 46
Worksheet time: 36mins
Name
Class
Date
1.
All of the following are dangers of credit, EXCEPT:
a)
Overspending
b)
Can be dangerous in tough economic times
c)
Can increase your financial options
d)
Can be expensive
2.
What is a credit report?
a)
A Report card
b)
Statement of every payment ever
c)
nothing
3.
True or False: Credit can lead to overspending.
a)
True
b)
False
4.
True or false: Extreme medical bills, having unexpected bills, loss of employment and divorce are reasons why individuals file for bankruptcy.
a)
True
b)
False
5.
Which of the following is NOT a factor to consider when taking out a loan?
a)
Length of the loan
b)
Total Cost of the loan
c)
Impact of the monthly payment on your budget
d)
How much time it takes to receive the loan
6.
How do you ruin your credit?
a)
Have someone Co-Sign your loan
b)
Not pay your bills
c)
Get a gas/Apartment card
d)
Cats
7.
What do you have to have to declare bankruptcy?
a)
State Judge
b)
Defendant
c)
Proof
d)
Tears
8.
Which of the following will increase your credit card's APR?
a)
Paying the minimum.
b)
Missing a credit card payment.
c)
Paying off the full balance.
d)
Cashing in on rewards points.
9.
Which of the following statements about credit scores is TRUE?
a)
Credit scores reflect how likely individuals are to repay their debts.
b)
Credit Scores range from the low 300's to the mid 800's.
c)
Each person has three credit scores.
d)
All of the above.
10.
Which of the following actions can NEGATIVELY impact your credit score?
a)
You disputed an item on your credit report.
b)
You forgot to pay the cable bill.
c)
You pay all your bills in cash.
d)
You use a small amount of your available credit.
11.
Which of the following would IMPROVE your credit score.
a)
Closing out old credit cards.
b)
Paying off your credit card bill.
c)
Using a large portion of your credit limit.
d)
Opening a new savings account.
12.
Having a low credit score can make it more difficult to:
a)
Obtain a car loan.
b)
Open a new credit card.
c)
Secure an apartment lease.
d)
All of the above.
13.
Interest is:
a)
A charge for lending money to a bank
b)
The amount owed for borrowing money
c)
the amount added into your savings when opening a bank account
d)
a charge for the convenience of accessing money stored in your bank account
14.
You will NOT owe any interest if you pay your entire credit card bill by the due date.
a)
True
b)
False
15.
The "term" is the initial amount of money borrowed in a loan.
a)
True
b)
False
16.
______________ is the amount of money you pay to use someone else's money.
a)
Interest
b)
Credit
c)
Principal
d)
Term
17.
Before using credit you should ask yourself is using credit worth it for this purchase?
a)
True
b)
False
18.
An example of closed-ended credit is a(n) _______________
a)
Installment loan
b)
Credit card
c)
Equity Credit line
19.
Type of loan used specifically for purchasing a home is a __________
a)
Mortgage
b)
Student Loan
c)
Equity Line of Credit
d)
Credit Card
20.
Another name for open ended credit is ____________ credit
a)
Never ending
b)
Revolving
c)
Spinning
d)
Endless
21.
_____________ is a report that details how a person has used credit in the past.
a)
Credit report
b)
Credit card
c)
Credit score
d)
Credit history
22.
This is when the interest rate will remain the same for the life of the loan
a)
Adjustable rate
b)
Balloon rate
c)
Never changing rate
d)
Fixed rate
23.
The amount of time your are obligated to make payments on a loan is the
a)
Interest rate
b)
Term
c)
Principal
d)
Annual percentage rate
24.
Amount of time before interest starts accumulating on charged purchases is the ___________
a)
Forgiveness period
b)
No interest period
c)
Free period
d)
Grace period
25.
Which of the following can impact your credit score?
a)
Living with our parents to cut down on expenses
b)
Making a late car loan payment
c)
Paying cash for a used car
d)
Getting bonus pay from your employer
26.
The fee incurred when you exceed our credit limit on your credit card is the __________
a)
Annual fee
b)
Cash-advance fee
c)
Service fee
d)
Over the limit fee
27.
You will pay more interest on cash advances on your credit card than on credit card purchases.
a)
True
b)
False
28.
__________ is the entire amount of money you owe to lenders
a)
Bankruptcy
b)
Debt
c)
Obligation
d)
Duty
29.
The legal process to get out of debt when you can no longer make all your payments is called _________
a)
Bankruptcy
b)
Indebtedness
c)
Financial disaster
d)
Trouble
30.
Items bought on credit and paid for over long periods of time cost the same as paying cash
a)
True
b)
False
31.
Money you pay up front toward the purchase to reduce the loan amount
a)
Down payment
b)
Up front payment
c)
Principal
d)
Interest
32.
A yearly fee for having an open account
a)
Annual Fee
b)
Yearly Fee
c)
Year End Fee
d)
Anniversary Fee
33.
The amount credit costs, expressed as a yearly percentage.
a)
periodic rate
b)
APR
c)
finance charge
d)
previous balance
34.
Allowing goods and services to be used now with a promise of payment in the future.
a)
credit
b)
bankruptcy
c)
debtor
d)
foreclosure
35.
All of the following are examples of benefits of credit, EXCEPT:
a)
Increase your standards of living
b)
Safer than cash
c)
Buying power
d)
Can tie up future income
36.
Which one is any fee associated with credit.
a)
Foreclosure
b)
Minimum Payment
c)
Credit Report Fee
d)
Finance Charge
37.
Examples of penalty fees include:
a)
over-the-limit fee
b)
late payment fee
c)
returned payment fee
d)
all of these
38.
How can you avoid paying interest fees on your credit card?
a)
Only use it for groceries
b)
pay off the full balance, on time, each month
c)
you cannot avoid interest fees
d)
only use Discover
39.
To build a good credit history, you should
a)
pay the minimum or more on your account each month
b)
pay on time or early
c)
be careful not to take on too much debt
d)
all of these
40.
The maximum amount you may borrow on a credit card is known as:
a)
creditworthiness
b)
credit report
c)
credit limit
d)
variable rate of credit
41.
True/False: A finance charge is the dollar cost for using credit.
a)
True
b)
False
42.
True/False: The longer the loan, the less you pay in interest.
a)
True
b)
False
43.
Which is NOT a way to establish credit?
a)
Creating an account with a bank
b)
Obtaining a credit card
c)
Getting married, having a few kids, buying some stuff, retiring to Florida, and dying.
d)
Having a parent co-sign a card
44.
Which is an effect of poor credit?
a)
Your health may deteriorate.
b)
If you are married, it could cause your partner to divorce you.
c)
You can't get the job you want.
d)
All of the above.
45.
Compounding interest is great when you are saving. How do you feel about it when it comes to loans?
a)
It is the best thing ever!
b)
I can take it or leave it.
c)
No thank you. The loan already costs enough.
46.
Which is NOT a financial consequence of debt?
a)
Debt can cost you your friends and family.
b)
Debt can lead to overspending.
c)
Debt obligates your future income.
d)
Debt can increase your insurance premium.
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