What is Credit?

There are different forms of credit such as loans and credit cards.

• True

• False

A credit card is a form of a loan.

• True

• False

When you apply for a loan, you will be told the interest rate.

• True

• False

A loan’s principal is the amount you pay back.

• True

• False

Credit card interest rates are usually lower than rates for other loans.

• True

• False

A credit card user can avoid interest charges by paying the entire balance when the bill is due.

• True

• False

A person can expect to pay the same amount of interest on a loan no matter what bank or credit union they use.

• True

• False

Interest rates on loans vary based on changes in the market for loans.

• True

• False

Riskier borrowers are likely to be charged lower interest rates.

• True

• False

The higher the interest rate, the more you will pay in interest.

• True

• False