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Credit and Debt Flashcards | StudBud
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Credit and Debt
Credit and Debt
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StudBud Administration
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#Credit and #Debit #Financial Literacy #Revision #Business Management #Year 11
Flashcards
13 cards
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Practice quiz
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Questions
13
Answers
1
Explain what happens when you only pay the minimum amount owed every month?
It takes longer to pay off costing you more in interest fees
You will pay off your card very quickly
The rate of interest paid decreases over time
You save a lot of money this way
2
What are some of the debt traps you can fall into when using a credit card?
Going crazy at Costco
Impulse purchases, cash advances, hidden costs
There are no traps, everything is straightforward
Long term freedom from debt
3
What is credit?
Your own money
Your dog's money
Borrowed money that you have to pay back
Your parent's money
4
What are some of the fees and charges which might add to the cost of a credit card?
Annual account keeping, late payments, cash advances
The bank charges more so their they can get a pay rise
Nobody knows, they can charge whatever they want
Government taxes, council rates
5
What is meant by the term 'interest-free period'?
The credit card is free with no extra charges
A period of time where interest is not charged
There is no interest for the entire duration of the loan
A period of time where high interest is charged
6
Explain what happens if you pay the entire amount owed on a credit card by the due date
You must pay a high rate of interest
Nothing, you still owe the original amount
Your credit card may explode
You do not have to pay interest
7
Why would anyone need a credit card?
Convenience
All of the above
Unexpected expenses
To make a purchase they can not afford
8
What might happen if you get a bad credit report?
Your parents will be very happy
Nothing, life will go on
The men in white suits will take you away
You may have trouble applying for important loans in future
9
What is a credit report?
A record of account history
A record of your transaction history
A record of your criminal history
A record of your credit history
10
What can you do if you experience credit card debt or repayment difficulties?
Speak to your bank or a financial advisor
Hand the debt to somebody else to deal with
Forget about it, it will go away eventually
Not a lot, nobody will help you
11
What are the disadvantages of credit cards with an interest-free period?
No disadvantages, no hidden costs
Lower interest rates after the interest-free period
There are no cards with an interest-free period
Higher penalties, higher future interest rates
12
What is a debt collector?
A company that will never contact you if you have a debt
A company that constantly pursues you to pay back your debt
A company that will give you the money to pay off your debt
A financial planner
13
Which payment method is cheapest?
Credit with an interest-free period
Your own cash from your own savings
Credit, lets ignore the interest
Cash advances made using credit
