NEW
Font size
S
M
L
XL
WorksheetsCredit Cards/Reports
Total questions: 28
Worksheet time: 14mins
Name
Class
Date
1.
What is credit?
a)
Money allocated to a specific account
for future use by the consumer without borrowing
b)
Goods, services, or money received in
exchange for a promise to pay a definite sum of money at a future date
c)
The ability and willingness of an
individual to pay back a loan as perceived by the lender
d)
An individual’s character, capital,
capacity, collateral and conditions
2.
What is one characteristic of closed-end credit?
a)
It is a continuous loan the borrower
must repay with a revolving balance
b)
Equal payments are required on regular
basis until the loan is repaid
c)
Credit limits vary depending upon the
loan balance
d)
Interest rates vary depending on the
repayment history
3.
What is one characteristic of open-end credit?
a)
A down payment must be made before
receiving the loan
b)
Individuals are allowed to borrow an
unlimited amount of money as long as they pay it back
c)
Credit is extended in advance so the
borrower does not have to apply for credit each time credit is desired
d)
Payments are equal and are required on a
regular basis
4.
How can a cardholder avoid paying interest on a credit card?
a)
Pay the minimum balance every month
b)
Pay the balance in full every month
c)
Only use a credit card for balance
transfers
d)
Interest is always paid on a credit card
5.
Which of the following is not considered an advantage to using a credit card?
a)
Credit cards eliminate the need for savings
b)
Credit cards are useful for emergencies
c)
Credit cards are often required to hold
a reservation
d)
Credit cards offer protection against
fraud
6.
If a credit card is used properly, what benefits does it have for the cardholder?
a)
The cardholder will pay higher interest
rates on other forms of credit
b)
The cardholder will develop a positive
credit history
c)
The cardholder will develop a negative
credit history
d)
There are no benefits for the cardholder
7.
According to the Federal Truth in Lending Act, where must the terms and conditions of credit cards be posted?
a)
On the back of the credit card
b)
In the Schumer box
c)
On the credit card’s Web site only
d)
They do not need to be posted
8.
When reviewing a credit card statement, what is the past due amount?
a)
The minimum amount to be paid
b)
The minimum payment due not paid by the
due date
c)
The total amount owed to a credit card
d)
The charges assessed to the account for
use
9.
Paying the minimum payment on a credit card every month will:
a)
pay a large percentage of the total
balance
b)
make the final amount paid substantially
higher than the amount initially charged to the card
c)
help the cardholder create a plan for
paying off a credit card in a decent amount of time
d)
allow the cardholder to avoid paying any
interest charges
10.
Becky no longer wants to use her Clothes-R-Us store credit card. What should she do with the credit card?
a)
File the credit card away for use at a
later time
b)
Let a family member take over the credit
account so her credit score is not affected
c)
Keep the credit card in her wallet
d)
Close the account by phone and in writing and cut up the card
11.
What is a safety tip to remember with credit cards?
a)
Throw away all credit card offers
without opening them
b)
Keep a list of all cards, account
numbers, and phone numbers separate from cards
c)
Loan your card only to those in your
immediate family, since federal laws offer protection when a relative uses
your card
d)
Open as many credit card accounts as
possible
12.
Which of the following best describes a credit report?
a)
A summary of a consumer’s credit
accounts and payments on those accounts
b)
A number that describes how likely a
consumer is to handle credit in a responsible manner
c)
A summary of a consumer’s past
addresses, past employment, and funds available in savings
d)
A record of all credit applications as
well as medical information and legal proceedings
13.
Which of the following is NOT included in an individual’s credit report?
a)
Current and past addresses
b)
Employment history
c)
Bankruptcies and foreclosures
d)
Medical information
14.
What information is NOT included when calculating an individual’s credit score?
a)
Consumer’s payment history
b)
Consumer’s salary
c)
Consumer’s outstanding debt
d)
Consumer’s pursuit of new credit
15.
A consumer will develop a positive credit history if they:
a)
maintain reasonable amounts of unused
credit
b)
pay phone and utilities on time
c)
pay cash for majority of purchases
d)
open credit accounts in their parent’s
name
16.
A low credit score will affect an individual financially because the ___________.
a)
interest rate of loans will be lower
b)
purchase price of an item will be higher
c)
monthly payments will be lower
d)
the interest rate of loans will be higher
17.
Jenny is 21 years old and has applied for credit for the first time. Her credit application was declined, because she had no credit history. What would you recommend Jenny do to begin to build a positive credit history?
a)
Acquire as many credit cards as possible
b)
Obtain a secured credit card
c)
Re-apply for the same credit until her
credit application is finally accepted
d)
Apply for as many different types of
credit as possible until she is accepted
18.
The best place for a consumer to acquire his/her credit report is at a:
a)
public library
b)
depository institution
c)
credit reporting agency
d)
municipal court
19.
When may a person view his/her credit report for free?
a)
At any time and an unlimited number of
times
b)
Once a year, from each of the three main
credit reporting agencies
c)
A person may not review his/her credit
report
d)
If a person has sufficient financial
resources
20.
Which would result in a consumer developing a negative credit history?
a)
Paying bills consistently and on time
b)
Applying for credit many times within a
short period of time
c)
Having a criminal record
d)
Holding a low number of credit/store
cards
21.
What are the three credit reporting agencies?
a)
Transmission, Experian, and Equicredit
b)
Equifax, Transunion, and Experian
c)
Transmission, Expedia, and Equifax
d)
Equicredit, Expedia, and Transunion
22.
The interest or money that is charged a borrower for the use of credit is the _____.
a)
finance charge
b)
collateral
c)
proration
d)
all of these
23.
The amount borrowed is known as the ______.
a)
credit
b)
interest
c)
capital
d)
principal
24.
Which of the following is not an advantage of using credit?
a)
It allows you to shop only at one store.
b)
It is convenient.
c)
It is safer than carrying a large sums
of cash.
d)
It is useful in emergency situations.
25.
Property you possess that is worth more than your debts is called _______.
a)
collateral
b)
capital
c)
principal
d)
interest
26.
A loan for which the borrower pledges property to ensure repayment is a(n) ________.
a)
installment purchase agreement
b)
secured loan
c)
prorated loan
d)
contract
27.
Credit that can be used again and again (as long as the balance owed does not exceed the limit) is called _________.
a)
installment
b)
open-ended
c)
closed-ended
d)
contract
28.
At which of the following will you probably get the lowest rate of interest for a consumer loan?
a)
Commercial bank
b)
Finance company
c)
Credit union
d)
Pawnbroker
Reset
