WorksheetsCh 7 Credit/Debt VOCAB Quiz
Total questions: 42
Worksheet time: 21mins
What is an acceleration clause?
A fee for paying off a loan early
A rule limiting how much you can borrow
A contract provision allowing full repayment if the borrower defaults
A type of secured loan
What is bankruptcy?
A. A type of savings plan
B. A legal process to eliminate or repay debt
C. A credit score range
D. A loan agreement
Which type of bankruptcy eliminates most unsecured debts?
Chapter 11
Chapter 12
Chapter 7
Chapter 13
Which bankruptcy involves a 3–5 year repayment plan?
Chapter 7
Chapter 9
Chapter 11
Chapter 13
What is a cash advance?
A. A refund from a credit card
B. Cash borrowed using a credit card
C. A loan with no interest
D. A paycheck bonus
Closed-end credit is best described as:
Credit that can be reused repeatedly
A loan with a fixed amount and fixed payments
Credit with no limit
Credit backed by collateral only
What is collateral?
Interest charged on a loan
Property pledged to secure a loan
A credit score factor
A monthly payment
A collection agency exists to:
Issue new credit
Track credit scores
Collect unpaid debts
Approve loans
Consumer credit is used to:
Fund business expenses
Buy personal goods and services
Purchase stocks
Pay taxes
A contract is:
A suggestion
A legally binding agreement
A credit report
A budget plan
What does a credit bureau do?
Lends money
Sets interest rates
Collects and stores credit information
Approves bankruptcies
Credit counseling helps consumers:
Increase spending
Avoid credit reports
Manage debt and repayment plans
Open new credit cards
Credit fraud involves:
Missing payments
Identity theft or unauthorized use of information
High interest rates
Too many credit cards
Credit history shows:
Current income
Borrowing and repayment behavior
Monthly expenses
Net worth
A credit rating is an evaluation of:
Income level
Spending habits
Creditworthiness
Savings rate
A credit report is:
A. A single number
B. A detailed record of credit activity
C. A loan contract
D. A payment schedule
A credit score is:
A. A type of loan
B. A repayment plan
C. A numerical measure of credit risk
D. A finance charge
Being creditworthy means:
Avoiding credit
Likely to repay borrowed money
Having no debt
Using cash only
Debt is:
Money saved
Money owed
Interest earned
A credit score
A debtor is someone who:
Lends money
Owes money
Collects debt
Invests money
A down payment is:
A monthly bill
Interest paid yearly
An initial payment toward a purchase
A finance charge
Easy-access credit is often:
Low-cost
Hard to obtain
Expensive with high interest
Backed by collateral
The finance charge represents:
The loan balance
The total cost of borrowing
The down payment
The credit limit
Foreclosure occurs when:
A debt is forgiven
A home is refinanced
A lender takes property due to missed payments
A loan is paid early
Garnishment is:
Voluntary repayment
Wage withholding by court order
A credit score penalty
A loan type
27. A grace period is:
A. Extra time to pay without penalty
B. A loan contract
C. A credit limit increase
D. A type of interest
An installment loan is repaid:
All at once
In variable payments
In regular fixed payments
With no interest
A line of credit allows borrowers to:
Borrow once only
Reuse credit up to a limit
Avoid interest
Eliminate debt
A low-risk borrower is someone who:
Has no job
Has poor credit
Is likely to repay on time
Uses payday loans
Open-end credit is:
A fixed loan
Credit that can be reused repeatedly
Credit with collateral only
A short-term loan
A pawnshop loan is secured by:
Income
Credit score
Personal property
Bank accounts
A payday loan is best described as:
Long-term and low interest
Short-term and high interest
Secured by a home
Interest-free
The principal of a loan is:
The interest paid
The original amount borrowed
The monthly payment
The finance charge
A rent-to-own agreement allows consumers to:
Lease without buying
Rent with the option to purchase later
Buy with no payments
Avoid contracts
Repossession occurs when:
Debt is forgiven
Lender takes back collateral
Credit score improves
Loan is refinanced
A revolving credit account:
Has one fixed payment
Allows repeated borrowing and repayment
Must be paid off immediately
Is always secured
Secured credit requires:
Good income
A cosigner
Collateral
High interest
A subprime credit card is designed for borrowers with:
Excellent credit
No income
Poor or limited credit
A title loan uses which as collateral?
Home deed
Paycheck
Vehicle title
Credit card
What does APR stand for?
Average Payment Ratio
Annual Percentage Rate
Applied Principal Rate
Annual Payment Rule
Match the following terms with their correct descriptions.
Cosigner - (a)
Creditor - (b)
Debtor - (c)
Broker - (d)
Cosigner
Creditor
Debtor
Broker
What should you do if you find yourself in debt?
Ignore the debt and hope it goes away
Borrow more money to pay off the debt
Create a plan to pay off the debt over time
Spend more money to distract yourself from the debt
