Week 2: Credit

What is credit?

• Money you borrow and must repay

• Money you give to someone else to borrow

• A type of investment

• A type of insurance

What is the most common type of credit?

• Revolving credit

• Installment credit

• Mortgage credit

• Home equity credit

What is a credit score?

• A number that represents your creditworthiness

• A number that represents your income

• A number that represents your net worth

• A number that represents your debt-to-income ratio

What is the highest credit score you can have?

• 500

• 750

• 850

• 1000

What is a secured credit card?

• A credit card that requires collateral

• A credit card that has a low interest rate

• A credit card that has a high credit limit

• A credit card that has no annual fee

What is the annual percentage rate (APR)?

• The interest rate you pay on a loan or credit card balance

• The amount of money you owe on a loan or credit card balance

• The amount of money you can borrow on a loan or credit card

• The amount of time you have to repay a loan or credit card balance

What is a grace period?

• The amount of time you have to make a payment before it is considered late

• The amount of time you have to dispute a charge on your credit card statement

• The amount of time you have to pay off your entire credit card balance without incurring interest charges

• The amount of time you have to apply for a credit card

What is a balance transfer?

• Moving a balance from one credit card to another

• Moving a balance from a credit card to a bank account

• Paying off a credit card balance in full

• Applying for a new credit card

What is a credit limit?

• The maximum amount of money you can borrow on a loan or credit card

• The minimum amount of money you must repay on a loan or credit card

• The amount of money you owe on a loan or credit card

• The interest rate you pay on a loan or credit card

What is a credit report?

• A detailed record of your credit history

• A document that shows how much money you earn

• A document that shows how much money you owe

• A document that shows your net worth