Theme 3 Review

What is credit?

• The amount, including interest, a borrower repays

• The interest paid on an item bought with a credit card

• The cost of interest and fees over the life of the loan

• The report used to decide whether or not to extend a loan

Which of the following do not involve interest payments on purchases?

• Personal loans

• Credit cards

• Debit cards

• Title loans

Which of the following is a disadvantage of using a credit card?

• Convenience of using now

• Ability to purchase big items

• Widely accepted for payment

• Subject to interest and fees

Which of the following is not addressed by consumer credit laws?

• How a consumer’s credit is collected and used

• Information given to consumers upon agreement of loan

• When and where debt collectors can contact consumers

• How much a credit card company can charge in interest

Which of the following has a maximum credit limit that can be used for multiple purchases and can be paid back over time?

• Title loans

• Credit card

• Mortgage

• Paycheck loan

Which of the following is not an example of an installment loan?

• Mortgage

• Auto loan

• Debit card

• Student loan

What is the best way to improve a bad credit history?

• Apply for additional credit cards.

• Pay off the lowest interest rate cards first.

• Use credit cards instead of paying with cash.

• Pay more than the monthly minimum payment.

Which of the following have the highest interest rates?

• Payday loans

• Personal loans

• Credit cards

• Student loans

Which of the following is true about credit reports?

• They are prepared once every five years.

• They list payment history and debt levels.

• They are used to determine taxes owed.

• They are only available to financial institutions.

Which of the following is one of the Five C’s of credit?

• Character

• Convenience

• Consistency

• Calculation