Credit and Loans Quiz 2.13

Nora went to a store and bought a new laptop using her credit card. Once the payment agreement was made, the purchase amount became what?

• IOU

• Loan

• Debt

• Mortgage

John was able to purchase a new laptop without paying cash upfront, thanks to his credit card.

• True

• False

John signs a credit agreement to purchase a new car. This agreement is not legally binding.

• True

• False

Imagine you are at a bank applying for a credit card. The bank manager tells you that using the credit card is completely free of charge. Is this statement true?

• True

• False

Before approving a mortgage, banks do not assess an applicant's ability to make future payments.

• True

• False

Abigail, Emma, and Aiden are running a small bakery in their hometown. To cover daily expenses such as rent for the bakery space, salaries for their employees, and utility bills, they are considering taking a loan. Which type of loan is often used for such operational expenses?

• Intermediate-term loans

• Lump loans

• Short-term loans

• Large loans

Oliver wants to buy a new car but doesn't have enough savings. He is considering taking a loan. Which of the following is an example of an intermediate-term loan that Oliver can consider?

• IOUs

• Credit cards

• Automobile loan

• Mortgage for houses

Imagine you've just made a purchase with your credit card. A grace period is a free period which allows you to avoid finance charges by paying your balance in full before the due date.

• False

• True

Imagine you have a credit card from XYZ Bank. Each year, XYZ Bank charges you a certain amount for using their credit card. This charge is known as an annual fee.

• False

• True

Sophia is considering different ways to manage her finances. She is aware of various types of credit but is unsure about one of them. Which of the following is NOT a type of credit?

• Credit cards

• Debit cards

• Loans

• Revolving credit accounts