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Review of Unit 4 Credit- Flashcards | StudBud
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Review of Unit 4 Credit-
Review of Unit 4 Credit-
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1
When discussing a loan, such as a college loan or auto loan, what does the word "principal" mean?
The amount of interest you pay over the whole length of the loan
The total amount you borrowed
The total amount of money you owe
The total number of months you will have to repay the loan
2
An additional charge imposed when a borrower fails to make a payment by the designated due date
Overpayment Fee
Penalty Fee
Tardy Fee
Late Fee
3
The total yearly cost of borrowing money, including interest and additional fees, expressed as a percentage.
Applied Principal Rate
Annual Percentage Rate
Annual Payment Refund
Agreed Principal Rate
4
The additional cost of borrowing money, which serves as the lender's fee for providing the funds.
Collateral
Interest
Loan
Principal
5
What is the key difference between a credit card and a debit card?
you can use credit card at age 25 but debit card at 18
Credit cards borrow $, debit cards take $ straight from checking account
Credit cards come from credit unions, while debit cards come from banks
Wealthy people use credit cards, people with lower incomes use debit cards
6
The total amount of money owed to creditors or financial institutions that must be repaid according to agreed-upon terms
Debt
Interest
Budget
Loan
7
A sum of money borrowed from a bank, credit union that must be repaid with interest over a specific period o
Principal
Loan
Interest
Debt
8
Craig isn't sure if he should open up a credit card account or get a bank loan. What question is MOST useful in helping
Are you using the money to purchase an item that is a need or a want?
How much money do you have in your bank account?
Are you responsible with your money?
Are you trying to make a bunch of small purchases or one large purchase
9
Using this portion of a credit card statement, how much did the credit card owner pay toward their bill last month?
$167.49
$2,425
$400
$267.49
10
What is the minimum amount this cardholder must pay on this month's statement?
$400
$167.49
You can't tell from this portion of the statement
$2,590.61
11
A fixed payment made at regular intervals to gradually repay a loan over a specified period of time.
Installment
Payment
Default
Bill
12
A payment card that allows you to borrow money from a financial institution to make purchases, and pay the amount later
Debit Card
Credit
Borrowing
Credit Card
13
An asset that a borrower offers as security for a loan, which can be seized by the lender if the borrower fails to rep
Default
Collateral
Agreed Debt
Principal
14
A financial plan that tracks income and expenses, helping individuals manage money and make informed spending decisions.
Installment
Default
Plan
Budget
15
A payment card that directly withdraws money from a person's checking or savings account when making a purchase
Direct Deposit
Credit
Debit Card
Credit Card
16
Miguel's parents keep telling him he should worry about his credit score. He says, "Why bother?" Why should Miguel care?
Miguel will not be able to apply for colleges without a strong credit score
positive credit score, lenders allow him to pay back only a portion of loan
high credit score makes it easier to get loans with better interest rate
low credit score makes it easier to get loans with better interest rate
17
Which statement about credit card interest rates is TRUE?
A high interest rate means you'll pay MORE money total
Most credit cards do not charge any interest rate
A high interest rate means you'll pay LESS money total
The more money you spend on purchases the higher your interest rate will be
18
The practice of managing money wisely, making timely payments, and maintaining a good credit history
Financial Literacy
Finacial Dominance
Financial Responsibility
Financial Freedom
19
Each of the following factors impacts your credit score EXCEPT...
Payment history
Bank account balance
Length of credit history
Mix of credit types
20
Which age group tends to have the most credit card debt?
Middle-aged people
Young adults
Credit card debt is evenly distributed among all age groups
Senior citizens
21
The failure to repay a loan according to the agreed-upon terms, can result in serious financial consequences
Deliquency
Fault
Default
Deviation
22
The process of returning borrowed money to the lender, typically according to agreed-upon terms and conditions
Repayment
Payback
Credit Terms
Bank Transaction
23
Financial arrangement where a person borrows money, receives goods/services promising to pay back it back with interest
Credit Card
Borrowing
Debit Card
Credit
24
The original amount of money borrowed before interest is added, which gradually decreases as payments are made.
Capacity
Loan
Principal
Default
25
What is the best way to avoid going into large debt on your credit card?
Avoid paying the bill every month so your bank account stays high
Avoid paying the bill every month so your bank account stays high
Pay your full balance every month
Pay half your balance every month
26
Katherine has been using her credit card very responsibly in hopes of raising her credit score. Which score would indica
750
350
550
950
27
A numerical rating that represents an individual's creditworthiness
Number Score
Credit Score
Credit Number
Rating Score
28
What is one benefit of borrowing money from a friend or family member instead of from the bank?
You don't have to repay your friends or family if you don't want to
Friends/family will work with you to set up a repayment plan you can afford
borrow more $ from a friend/family because they have more cash than a bank
Friends & family cannot legally charge interest on the loan, but bank can
29
Kervin really wants to buy a new bike, what's one reason to be careful about using credit?
Credit will force him to buy a cheaper bike than he could with debit
Credit will take the money straight from his checking account
Credit will force him to pay taxes on his bike purchase
Credit will charge interest every month until he repays his full balance
30
According to this portion of a credit card statement, how much did the cardholder pay in total interest this billing cyc
$1.60
$33.10
$31.50
$2,458.10
31
The act of receiving money from a lender with the intention of returning the full amount, often with additional charges
Borrowing
Lending
Credit
Loan
