WorksheetsUnit 3: Credit Study Guide
Total questions: 36
Worksheet time: 19mins
About how many people favor credit over cash or debit?
40%
10%
60%
25%
How can having credit help in an emergency situation?
In case of accidents or hospital visits
To buy luxury cars instantly
To avoid paying any bills ever
To get free vacations
What are student loans?
Loans for college student
Grants for research projects
Scholarships for sports achievements
Gifts from alumni
Why does credit score matter?
The better the score the lower the interest
It determines your favorite color
It affects your height
It changes your birth date
Which type of debt could take your property if you don’t make payments?
Secure
Unsecured
Revolving
Installment
Why is it important to know the difference when prioritizing debt repayment?
So you don’t lose your property
To increase your monthly expenses
To avoid paying any debts
To reduce your credit score
What could happen if you do not pay back unsecured loans?
Wages could be garnished
You will receive a tax refund
You will win a lottery
Your credit score will improve
Credit card debt is the most widely held unsecured debt, however which is another example of unsecured debt?
Medical Bills
Auto Loans
Mortgage Loans
Home Equity Loans
What is a good rule of thumb for how much money you should spend on your house payment?
28% of your monthly income
50% of your monthly income
10% of your monthly income
40% of your monthly income
If you spend $50 a week eating out, how much money do you spend in a year?
2600
1500
5200
2000
Why is it important to save money for retirement?
If not, you might not be able to stop working
Because it is required by law
To win a prize
So you can spend more on vacations now
What positive thing can come from opening a credit card?
A good credit score
Losing all your money instantly
Getting free vacations automatically
Having unlimited spending with no consequences
What is one thing you can do to keep your credit score high?
Pay bills on time
Ignore your bills
Max out your credit cards
Apply for many new credit cards at once
Which card(s) helps build your credit score?
Credit
Debit
Gift
Loyalty
Which card(s) is protected by federal law?
Credit
Gift
Prepaid
Store loyalty
Which card(s) can lead to excessive debt?
Credit
Library
Gift
ID
Which card(s) is open to anyone regardless of credit score or banking account?
Prepaid
Credit
Debit
Charge
What is the main reason you should pay off your credit card balance each month?
To avoid paying interest
To increase your credit limit immediately
To earn more reward points
To close your account faster
What is the main thing the bank will look at when you apply for a credit card?
How much money you earn in wages
Your favorite color
The type of car you drive
How many pets you have
What is one of the first things you should do when trying to get out of debt?
Make a list of your total debt.
Ignore your bills and hope they go away.
Take out more loans to pay off old ones.
Spend more money to feel better.
What is one benefit of saving money for emergencies?
You can avoid using a credit card.
You will always earn interest.
You can spend more on luxury items.
You never have to budget again.
What is the definition of 'Authorized User'?
A person who has permission to use and/or carry another person's credit card, but isn't legally responsible for paying the bill.
A person who issues credit cards to others.
A person who is responsible for paying the credit card bill.
A person who can only view credit card statements but cannot use the card.
What is the definition of 'Collateral'?
Something valuable that the lender can take as payment if you can't or don't repay your secured loan.
A type of insurance policy for your loan.
A document that proves your income.
A fee charged by the lender for processing your loan application.
What is the definition of 'Grace Period'?
The number of days between a borrower's statement date and when payment is due, often without accruing interest.
A penalty charged for late payments on a loan or credit card.
The total amount of interest paid over the life of a loan.
The minimum payment required each month on a credit account.
What is the definition of 'Lease'?
A contract (often used for cars or property) by which one party gives property to another for a specified time, usually in return for a periodic payment.
A document that transfers ownership of a vehicle permanently.
A type of insurance policy for property damage.
A legal agreement to sell goods internationally.
What is the definition of 'Mortgage'?
A loan taken by individuals and businesses to make real estate purchases without paying the entire value of the purchase upfront.
A type of insurance policy for property damage.
A government tax on property sales.
A fee paid to real estate agents for their services.
What is the definition of 'Secured Debt'?
Debt tied to a specific tangible asset that can be used as collateral and repossessed if payments are not made.
Debt that is not associated with any collateral and is based solely on the borrower's creditworthiness.
Debt that is forgiven after a certain period regardless of payment status.
Debt that is only used for short-term business expenses and cannot be secured by assets.
What is the definition of 'Unsecured Debt'?
This means that if the borrower fails to repay the debt, the lender cannot claim any specific asset to recover the owed amount. Examples of unsecured debt include credit card debt, personal loans, and medical bills.
Unsecured debt is a type of debt that is always backed by real estate property as collateral.
Unsecured debt is a type of debt that is only given to businesses and not individuals.
Unsecured debt is a type of debt that requires a co-signer for approval.
What is the term for the following definition? Debt not tied to a specific asset, making it difficult or impossible for the lender to repossess items if payments are not made.
Unsecured debt
Secured debt
Revolving credit
Installment loan
What can you do to avoid debt?
Spend more money than you earn
Use all your savings to buy expensive things
Only use money that you have, instead of borrowing
Borrow money from many different people
An arrangement to receive cash, goods, or services now and pay for them in the future.
Credit
Asset
Interest
APR
Which item is important to consider when selecting a credit card?
Annual Percentage Rate (APR)
Fees
The look of the credit card
Both APR and fees
