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WorksheetsCredit 1 - What is Credit?
Total questions: 23
Worksheet time: 12mins
Revolving credit is...
a type of credit that can be used repeatedly up to a certain limit as long as the account is open and payments are made on time.
a type of credit that can be used only once up to a certain limit and must be closed immediately after all payments are due
a spinning door with money in it
a round device that holds credit cards and spins, making it easy to shuffle through all your credit cards quickly
Which of the following could be a SECURED loan? (hint: choose 2 correct answers)
Auto loan
Student loan
Mortgage
Overdraft
If the collateral for your secured loan can be taken away, why get a secured loan at all?
Because they usually have a higher interest rate
Because they usually have a lower interest rate
Banks give you an extra 90 days to make a missed payment
Banks typically don't charge interest for the first 12 months
A loan which the borrower must repay the amount in a specified number of equal payments.
Title loan
Payday loan
Closed‐end credit
Refund anticipation loan
A line of credit established in advance so the borrower does not have to apply for credit each time new credit is desired.
Rent‐to‐own loan
Pawn loan
Open‐end credit
Refund anticipation loan
An example of closed‐end credit is a secure credit card.
True
False
Examples of when credit, if used responsibly, can be a positive. (Check All that Apply)
Credit can provide long‐term benefits such as the opportunity to earn a higher income by attending college
Credit may allow individuals to make large purchases, such as an automobile, that allows them to get to and from work.
Having a credit card will allow an individual to make online purchases more securely and provide a source of open‐end credit in case of emergency.
Credit will not allow individuals to make large purchases, such as an automobile, that allows them to get to and from work.
A simple definition of credit could be stated as...
Buy now, pay now
Buy later, pay later
Buy later, pay now
Buy now, pay later
A creditor is a person who owes you money.
True
False
What is unique about an unsecured loan?
Require no collateral
Require collateral
Interest free
Don't affect your credit score
A fee paid monthly to the lender for borrowing money.
unsecured bank debt
interest payment
secured bank debt
origination fee
The amount of money borrow from a creditor is called _.
guarantee
inventory
interest
principal
Funds that are lent to businesses with an agreement to get repaid with interest is called __.
capital
debt
principal
equity
There is a set payoff date for the credit.
Closed-end Credit
Secured Loan
Open-end Credit
Unsecured Loan
The total amount of money owed lenders or creditors.
Loan
Debt
Credit
Collateral
Is a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.
Loan
Debt
Credit
Collateral
Is the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
Loan
Debt
Credit
Collateral
A debtor is a person who owes money.
True
False
Which of the following allows a creditor to demand the entire amount of the loan if the debtor is not fulfilling their end of the contract?
acceleration clause
demand clause
debt clause
contract
