TEST: Unit 3 - Types of Credit

A variable-rate is when...

• the interest rate can change during the duration of the loan
• the interest rate remains constant/the same during the duration of the loan

A fixed-rate is when...

• the interest rate can change during the duration of the loan
• the interest rate remains constant/the same during the duration of the loan

A debt that is tied to a specific asset is a

• Secured Debt
• Unsecured Debt

An open line of credit that can be used for any purchases is

• Secured Debt
• Unsecured Debt

A credit card offer comes in the mail with the bold print "0% A.P.R. for New Accounts." Which important piece of information should you find before thinking about signing up?

• Can I get two or more cards with this offer?
• What is the A.P.R. after the introductory period?
• What kind of designs can I get on my card?

Reading through a credit card disclosure (aka the Schumer Box), you see the A.P.R. for a specific card is set at 9.99% - 23.99%. Which of the following statements is probably TRUE?

• When given a range of A.P.R.s like this, you can assume most cardholders pay the lowest rate listed
• One of the primary factors determining your card's A.P.R. is your credit score
• The A.P.R. on credit cards is usually fixed so they won't be adjusted as long as you are a cardholder

What is a factor that is NOT considered when determining interest rate?

• Credit score
• Actual loan terms
• Life situation
• Whether you have a dog or a cat

Principal is the amount you're _______________.

• buying
• borrowing
• time you have to pay it back

Interest is

• the percentage the bank charges you for lending you the money
• the amount you're borrowing
• the time you hvae to pay it back

Term is

• the amount you're borrowing
• the time you have to pay the loan back
• the person you're signing the loan with