WorksheetsChapter 25. The Basics of Credit
Total questions: 25
Worksheet time: 13mins
Name
Class
Date
1.
The annual percentage rate on a credit card determines _.
a)
The amount of interest you are charged on credit card purchases.
b)
The amount your credit limit can go up within a year
c)
How many credit cards that you can own
2.
Which term refers to a person who lends money or provides credit?
a)
debtor
b)
consumer
c)
creditor
d)
borrower
3.
Which term could be used to refer to the use of credit by a manufacturer to finance the development of a energy-efficient truck?
a)
commercial credit
b)
consumer credit
c)
military spending
d)
government spending
4.
Which is a factor that contributes to a good credit rating?
a)
avoiding the use of credit
b)
reaching your credit limit
c)
using credit in an emergency
d)
paying bill on time
5.
Which is NOT an advantage of using credit?
a)
traveling without large amounts of cash
b)
handling emergency financial needs
c)
committing future income to debt repayment
d)
contributing to the growth of the economy
6.
Which might cause your credit rating to be lowered?
a)
using credit in an emergency
b)
paying late or missing payments
c)
using savings instead of credit
d)
putting off purchases for a while
7.
Which is something you should consider before using credit to finance a major purchase?
a)
What is the difference between commercial and consumer credit
b)
What are the costs of using credit to make this purchase?
c)
Will the purchase contribute to economic growth?
d)
Have you recently used credit to make other purchases?
8.
Which might be obtained from a department store?
a)
a charge account
b)
a credit card
c)
a travel and entertainment card
d)
a credit union account
9.
Which depends on the degree of risk a creditor takes in lending money or selling on credit?
a)
whether the loan is short-term or long-term
b)
whether the borrower makes full or partial payment
c)
the use of a credit card or charge account
d)
the cost of the credit to the borrower
10.
Which is NOT a way credit card companies earn money?
a)
late fees and penalities
b)
annual fees
c)
interest
d)
sales taxes
11.
Which type of card often requires payment of the full amount due at the end of each month?
a)
single-purpose card
b)
travel and entertainment card
c)
multipurpose card
d)
installment card
12.
Which is true of single-purpose credit cards?
a)
Cardholders can pay part or all of the amount owed at the end of each 30-day period
b)
Interest is paid on the original amount financed at the end of each 30-day period
c)
Cardholders must pay the full amount owed at the end of each 30-day period
d)
Single-purpose cards can be used at different stores all over the world.
13.
Which type of loan might a farmer use to finance the growing of a crop?
a)
single-payment loan
b)
installment loan
c)
mortgage loan
d)
seller-provided loan
14.
Where might someone with no credit record or a poor credit rating expect to get long-term credit?
a)
a bank
b)
a credit card company
c)
a payday advance service
d)
a consumer finance company
15.
Which is NOT one of the Credit Reporting Agencies
a)
Equifax
b)
TransUnion
c)
FICO
d)
Experian
16.
Cards such as American Express and Diners Club are examples of Travel and Entertainment Cards.
a)
True
b)
False
17.
Single-purpose cards can be used to buy goods or services only at the business that issued the card.
a)
True
b)
False
18.
Multipurpose cards are called bank credit cards because they are issued by retailers.
a)
True
b)
False
19.
Which is NOT an example of a single-purpose card?
a)
BP Card (gas card)
b)
Visa
c)
Macy's Card
d)
JC Penny Card
20.
Payday advance services offer short-term loans until payday, but they charge high fees and interest.
a)
True
b)
False
21.
Credit cards are now using chips instead of magnetic strips to because chips increases security and can hold more than 100 times more information than magnetic.
a)
True
b)
False
22.
Credit cards vary in size vary.
a)
True
b)
False
23.
Many employers check applicants’ credit reports before making hiring decisions.
a)
False
b)
True
24.
In today's society using credit is _______ .
a)
routine
b)
difficult
c)
time consuming
d)
uncommon
25.
A disadvantage to using credit is that you have committed some of your future income since the debt must be repaid.
a)
True
b)
False
100 %
