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WorksheetsCredit Counts!
Total questions: 30
Worksheet time: 15mins
What is debt?
Another word for death
Something, typically money, that is owed or due
A loan on which you do not have to pay interest
That which is incurred during childhood and consummated in college
What is a credit score?
The amount you can charge on an installment loan. It is determined by your bank.
A statistical number that evaluates a consumer's creditworthiness and is based on credit history. Generally, the range is from 300-850,
The rate at which interest will be charged on a loan.
The summary of all of your lines of credit. It includes types of credit, amount of debt, and an overview of how well you pay your monthly bills.
The amount charged if your payment is received after the billing due date.
Late payment fee
Overdue fee
Withdrawal fee
Lender fee
The maximum amount you are allowed to carry as a balance on the card
Interest
Annual fee
Credit limit
Cash advance fee
This is a fee that some, but not all credit card issuers charge to use their credit card.
Usury fee
Annual fee
Tax advance
Non-sufficient funds fee
The amount you must pay on a credit card, based on a percentage of the outstanding balance.
Total balance
Minimum payment
Monthly service charge
Introductory APR
Benefits of credit cards include:
Safe and convenient with some bonus financial features
Allows you to build a positive credit report IF you pay your balance on time
Needed for reservations and online shopping
all of these
Which one is considered a danger of using a credit card
No cash needed
Leads to overspending and poor financial decisions
Convenient
Earns rewards
To build a good credit history, you should
Open as much credit as possible and as quickly as possible
Use the maximum credit allowed on all your credit cards
Open both installment and revolving credit lines
Keep bills and loans in your parent's name and not in your own
What is credit?
Free money
A promise to pay back
Standard of living
A lender policy
What are the three major Credit Reporting Agencies (CRAs)? **MARK ALL THREE
Equifax
TransUnion
Experian
Eliptican
Which of the following will not help you build a credit history
Credit card
Auto loan
Debit card
Secured credit card
Which is true comparing debit cards and credit cards
Debit cards -- take from your bank account while credit cards you promise to pay back later
Credit companies give you a monthly statement but debit card companies do not
Credit cards take from your bank account, while debit cards get their money from VISA or MasterCard companies.
Many more business accept credit cards than debit cards
When loans are categorized as installment; monthly payments are _______. While a revolving loan has _____________ monthly payments.
constant, increasing
constant, variable
variable, increasing
variable, constant
The shorter your term length, the ________ your monthly payments, and the ________ the total interest you will pay.
higher, lower
higher, higher
lower, lower
lower, higher
When you read through the credit card disclosure (Schumer box) you see the APR for a specific card is set at 9.99% - 23.99%. Which TWO statements are true?
When given a range of APRs like this, you can assume most cardholders pay the lowest rate listed
Your APR will be within that range, depending on the strength of your credit history.
Some credit cards offer an introductory rate and after time your APR will rise within the percentages.
The APR on credit cards is usually fixed so it won't be adjusted as long as you are a cardholder
What is an advantage of using a credit card?
It will not affect your credit score or credit history
Since it is tied directly to your checking account, it prevents you from spending money you do not have
If you need to carry a balance, the interest rates are generally quite low (less than 5%)
If you pay off your balances every month in full it's like getting a short term interest free loan
The amount of time you will have when charges are not being subjective to interest fees. A common time frame is 25 days.
Minimum payment timeline
Introductory rate
Monthly statement
Grace period
Select the statement below that accurately describes a characteristic of a credit card.
You owe the same payment every month
You must have money deposited into a checking account to use the credit card for purchases
Making full payments on time every month is the only way to avoid interest charges
A Schumer box is required and easy to navigate when comparing and selecting a credit card.
What may NOT impact the interest rate on your loans?
Your relationship with the financial institution
Your credit score
The loan amount
Your level of education
What information on a Schumer Box should you focus on when choosing a credit card? (hint: choose 3 correct answers)
The term of the credit card
Annual Percentage Rate (APR)
Grace Period
Fees
How do you avoid paying interest on your credit card (or any other loan for that matter)?
Always make the minimum payment over time
Pay interest 1st, then pay what you can on leftover balance
Always make the full payment on time
Pay the principal 1st, then pay what you can on interest
Which is TRUE when you make only the minimum payment each month?
You are charged interest on the remaining balance
Your credit line is restored to its maximum amount
Credit card companies have permission to sell your information
It is the fastest way to pay off your debt
Examples of penalty fees include:
Over-the-limit fee
Late payment fee
Returned payment fee
All of these
