Credit and Debt

Which of the following are examples of credit?

• installment loans

• mortgages

• credit cards

• savings account

What is credit?

• The benefit or value that you give up to acquire something else

• Money you borrow that has to be paid back

• The cost of borrowing money expressed as a percentage

Which of the following is true about credit. Select all that apply.

• The financial institution covers the purchase when it's made.

• You pay the money back

• Credit cards take money directly from your checking account

• You'll be charged interest if you don't repay your balance in time

Which of these is an example of a debt?

• Buying dinner for a friend

• Paying for groceries with your debit card

• Owing a friend $25 for concert tickets

What is interest?

• The cost of borrowing money expressed as a percentage

• Money you borrow that has to be paid back

• The increase in the general prices of goods and services

Why should you avoid using credit for items that depreciate in value?

• You should always use credit for these items

• You will end up paying more in interest

• Your credit score will go down

What does accruing credit card debt mean?

• Repaying the financial institution your credit card debt

• Increasing the amt of credit card debt you owe

• Having money deposited into your account

Which of these is not an advantage of using a credit card over a debit card?

• rewards from spending

• overspending

• easily canceling purchases made by thieves

What does APR stand for?

• Annual payment rate

• Annual profit rate

• Annual percentage rate

Which of the following are used in calculating your credit score? Check all that apply

• payment history

• credit mix

• work history

• accounts owed