WorksheetsWISE Review: Credit
Total questions: 38
Worksheet time: 38mins
Which of the following is a source of credit that typically charges high interest rates for consumers with low credit scores?
A) Banks and credit unions
B) Finance company/Consumer Finance Company
C) Government agencies
D) Family and friends
Anika is trying to manage her student loans effectively. What is a good practice she should follow?
A) Ignoring changes in address
B) Defaulting on loans
C) Comparison shopping
D) Avoiding communication with lenders
Sophia is considering applying for a credit card and wants to understand the costs involved. What does APR stand for in the context of credit?
A) Annual Payment Rate
B) Annual Percentage Rate
C) Annual Premium Rate
D) Annual Penalty Rate
Which of the following is a benefit of credit?
A) Increased debt
B) Access to money for future purchases
C) Higher interest rates
D) Limited borrowing capacity
Abigail is considering different ways to borrow money. Which of the following is considered a loan from a credit card company?
Installment loans
Student loans
Credit cards
Personal loans
Olivia is applying for a loan to start her own business. The bank is assessing her application and wants to evaluate her integrity and trustworthiness. Which of the Five C’s of credit is the bank focusing on?
Capacity
Character
Collateral
Capital
James is trying to improve his credit score. Which factor can negatively impact his credit score?
Paying bills on time
Low debt to credit ratio
High debt to credit ratio
Applying for fewer loans
Hannah is applying for a loan and her bank mentions her FICO score. What does FICO stand for?
Financial Institution Credit Organization
Fair Isaac Corporation
Federal Income Credit Office
Fiscal Information Credit Organization
Priya is applying for a loan to start her new business. The bank is evaluating her application based on the Five C’s of credit. Which of the following is NOT a factor considered in this evaluation?
Conditions
Capacity
Creativity
Collateral
What is the effect of a higher down payment on monthly payments for a loan?
Increases the monthly payments
Decreases the monthly payments
Has no effect on monthly payments
Doubles the monthly payments
Elijah is considering buying a new laptop on credit. How does the length of the loan affect the price he will ultimately pay for the laptop?
Longer loans make the laptop cheaper
Shorter loans make the laptop cheaper
Length of loan has no effect on price
Longer loans make the laptop free
Mia is considering taking out a loan to pay for her college tuition. What is a characteristic of student loans?
They are secured loans
They require collateral
They are unsecured loans
They have no interest
Which of the following is a consumer consideration when applying for a loan?
The color of the loan document
The lender's office location
Debt-to-credit ratio
The lender's favorite color
Anika is considering getting a credit card. What is an advantage she might experience?
Inability to buy online
Convenience of not having to carry cash
Higher interest rates than loans
No need to pay bills
What is a recommended strategy for students starting with a credit card?
Start with a high limit
Avoid monitoring spending
Start with a low limit
Use only cash advances
What is the grace period in the context of credit card bills?
The time between the date on the credit card bill and the date payment is due
The time after the payment is made
The time before the credit card is issued
The time after the credit card expires
Mia has been using her credit card to make purchases but only pays the minimum amount due each month. What can result from this practice?
Lower interest rates
Higher cost of items over time
Immediate debt clearance
No finance charges
What is a potential consequence of late payments on a credit card?
Decrease in credit limit
Higher interest rates on balance due
Immediate account closure
No effect on credit score
Mia has just received her first credit card. Which of the following is a good practice for her to manage her credit card bills?
Pay only the minimum amount due
Lend the card to friends
Pay bill in full each month
Ignore the due date
Olivia is considering getting a credit card. What is a disadvantage she should be aware of?
No need to review invoices
Potential hidden fees and surcharges
Guaranteed low interest rates
Unlimited credit limit
According to credit card guidelines, when must a bill be mailed or delivered?
At least 21 days before the expiration of the grace period
On the day the payment is due
10 days after the payment is due
30 days before the card expires
Mason received a notification from his credit card company about upcoming changes to his card terms. What is the minimum advance notice required before these changes can take effect?
30 days
60 days
45 days
90 days
Which of the following is NOT a major credit reporting agency?
Equifax
Transunion
Experian
Freecreditreport.com
How long does negative information remain on a credit report?
Five years
Seven years
Ten years
Three years
Liam took out a loan to buy a car but is unable to make the payments. What is a consequence of defaulting on this loan?
Increased credit limit
Repossessions
Lower interest rates
Improved credit score
What must credit card companies disclose to consumers?
APR changes
Due dates and year-to-date totals on interest and fees
Credit score
Credit limit
Benjamin, a young professional, recently filed for personal bankruptcy. What is one of the impacts of this on his financial future?
Increased savings
Improved credit score
Credit report affected for at least 7 years
Lower interest rates
Scarlett is trying to understand her rights as a borrower when taking out a loan. Which act helps consumers like Scarlett know their rights regarding lending?
Fair Credit Reporting Act
Truth in Lending Act of 1968
Consumer Protection Act
Credit Card Accountability Act
Emma is experiencing difficulties in making her credit card payments. What is a recommended strategy for her to handle this situation?
Ignore creditors
Notify credit card company immediately
Increase spending
Close all bank accounts
What type of loans are considered "Easy Access Loans"?
Mortgage loans
Payday loans
Student loans
Auto loans
Liam has an installment loan and is considering prepaying it. What is the effect of prepaying an installment loan?
Increases the length of the loan
Reduces the length and cost of the loan
Has no effect on the loan
Increases the interest rate
Oliver is in need of a loan but has poor credit. What is an example of predatory lending in this situation?
Offering a loan with a high interest rate to Oliver
Providing Oliver a loan with zero interest
Offering Oliver a loan with a low payment schedule
Transferring balances from one card to another for Oliver
Ava recently made several purchases using her credit card. Why is it important for her to save the credit card receipts?
To check against credit card monthly statements
To use them as bookmarks
To collect them for a contest
To decorate a scrapbook
Emma and her spouse have a joint credit card, and Emma is a co-signer. Who is responsible for the payment of debt?
The primary cardholder
The bank
The credit card company
The government
Emma is considering taking a loan to buy a new car. What should she do to understand the financial agreement and evaluate the credit deal?
Read and understand the terms
Ignore the fine print
Ask a friend for advice
Assume all deals are the same
Mia is planning to apply for a loan to buy a new car. What is the primary purpose of her credit score in this scenario?
To assess a borrower's creditworthiness
To set insurance premiums
To determine eligibility for government benefits
To calculate annual taxes
Maya is trying to improve her credit score. Which of the following actions can help her achieve this?
Ignoring credit reports
Closing old credit accounts
Paying bills on time
Maxing out credit cards
James is considering getting a secured credit card. What is a common feature of this type of card?
It has no annual fees
It offers unlimited credit
It requires a security deposit
It does not affect credit score
