Credit Terminology

What is the minimum payment on a credit card?

• The total amount owed on the card
• The smallest amount of money required to pay towards the outstanding balance each month
• The credit limit on the card
• The interest charged on the card

What does APR stand for?

• Annual Percentage Rate
• Average Percentage Rate
• Annual Payment Rate
• Accrued Payment Ratio

What does the credit utilization ratio measure?

• The credit score of an individual
• The ratio of total credit card balances to total credit card limits
• The number of credit cards a person has
• The total amount of money borrowed

What is a revolving credit?

• A type of credit that requires collateral
• A type of credit with a predetermined credit limit that can be borrowed, repaid, and borrowed again
• A type of credit that is repaid in fixed payments over time
• A type of credit with a one-time borrowing limit

What is a credit card?

• A card that provides access to credit for purchases
• A card that allows you to withdraw cash from ATMs
• A card that stores personal information
• A card used for identification purposes

What is an installment loan?

• A loan that can be repaid in varying amounts each month
• A loan that requires no collateral
• A loan that has no fixed repayment schedule
• A loan that is repaid in regular, fixed payments over a set period of time

What does the term 'interest rate' refer to in the context of credit?

• The amount of money borrowed
• The original loan amount
• The total credit limit
• The percentage of a loan or credit card balance that is charged as interest over a certain period of time

What is a credit score based on?

• Credit card limit
• Number of credit inquiries
• Income level
• Credit history and financial behavior

What is collateral in the context of borrowing?

• Assets or property pledged as security for a loan
• The minimum payment required
• The original loan amount
• The interest charged on a loan

What is the main purpose of a credit report?

• To monitor spending habits
• To provide a detailed record of an individual's credit history
• To calculate the credit limit
• To track an individual's income