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Which statement is an example of using credit?

• A. Lily pays for groceries with cash.

• B. Jack borrows $500 to buy a new laptop.

• C. Maria deposits $100 into her savings account.

• D. Sam uses his debit card to buy lunch.

Sarah wants to save money for college. What is the best way for her to do this?

• Buy a dress to attend a birthday party

• Use a credit card to buy books

• Borrow money from her friends

• Spend less and save money in a bank account

Why do banks charge interest on credit card purchases?

• To help people save money

• To make sure people pay their bills

• To earn money for lending

• To make shopping easier

Ethan wants to buy a gaming console that costs $300. He has $150 saved. What is the best financial decision?

• Use a credit card and pay the bill slowly over time.

• Save more money until he can buy it without borrowing.

• Borrow money from his friend without planning to repay it.

• Spend his savings on something else instead.

What happens when you use a credit card and do not pay the full amount by the due date?

• You are charged interest.

• The balance disappears.

• You earn extra money.

• The bank gives you rewards for not paying.

Which of the following is an example of saving money?

• Rachel buys a new video game with her credit card.

• Jason borrows money from a friend and keeps it.

• Michael puts $20 into a savings account every week.

• Sophia takes out a loan to pay for a vacation and keeps her money.

Why is paying off your credit card debt on time important?

• So you can borrow less money in the future.

• Because the credit card company will forgive the debt.

• To make sure you can get a bigger interest later.

• To avoid paying extra money in interest.

Mike took out a $10,000 loan to start a business. What will happen if he only makes small payments each month and doesn’t pay the full amount quickly?

• The loan amount will get smaller without payments.

• The bank will forget about his loan.

• He will have to pay extra money in interest.

• His business will automatically start making more money.

What should someone consider before taking out a loan?

• The interest rate and how much extra they will pay

• If they can spend the money on clothes

• How quickly they can apply for another loan

• The size of one's family

• Whether they can afford the monthly payments

Which financial decisions can help a person avoid debt? Select TWO correct answers.

• Only buy things they can afford

• Using credit for every purchase

• Making minimum payments on credit cards

• Borrowing more than they can repay

• Creating a savings plan