Credit Cards

What is credit?

• •The ability to obtain goods and services without the promise to pay later

• •The ability to borrow money or obtain goods or services with the promise to pay later

• •The ability to use other people's credit without their knowledge

• •The ability to avoid paying bills

Why does credit matter?

• It can help you get approved for loans with higher Interest rates.

• It can make it harder to rent an apartment or get a job.

• It has no impact on your financial opportunities.

• It can help you save money by getting you approved for loans with lower interest rates.

What is one way to start building good credit?

• Applying for a credit card and maxing it out.

• Applying for a credit card and using it responsibly.

• Applying for a personal loan and missing payments.

• Applying for a car loan and exceeding payment dates.

What is the most important thing you can do to maintain good credit?

• Pay your bills on time.

• Close old credit card accounts.

• Rely heavily on credit.

• Increase your credit utilization rate.

What happens if you do not pay all the money you owe on a credit card at the end of the month?

• Nothing. Just make a payment when you can.

• Your credit card will be cut off.

• You will have to pay a finance charge.

• The amount you owe will not change.

What is the formula for calculating a new balance?

• New Balance = Previous Balance + New Purchases

• New Balance = Previous Balance + New Purchases - Credits and Payments

• New Balance= Previous balance - Finance Charge -New Purchases + Credits + Payments

• New Balance = Previous Balance + Finance Charge + New Purchases - Credits- Payments

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How do you avoid paying finance charges or other fees?

• Don't have a credit card in the first place

• Pay off the balance each month

• Max out the card

• Only paying the minimum is OK; they won't charge you extra

What is an advantage of having a credit card?

• Paying on time and in full builds good credit

• You can buy online and make large ticket purchases

• Many credit card companies protect your purchases in case something happens

• All of the above

A disadvantage of having credit cards is

• if you spend more than you pay back, you will build debt

• You can earn rewards or freebies

• You are required to have them.

Which one is true about having a poor credit score?

• A landlord might not rent to you.

• You might have higher interest rates.

• You may have to payback a loan in a shorter time frame.

• All of the above

• None of the above