Understanding Credit

What does the term "credit" mean?

• Buying something now and paying for it later

• Paying for something immediately

• Receiving a gift

• Saving money for future use

What is the principal in terms of credit?

• The amount of money borrowed

• The interest rate charged

• The length of time to repay

• The total amount repaid

What does interest refer to in the context of credit?

• The amount of money borrowed

• The length of time to repay

• What lenders charge you to borrow the money

• The total amount repaid

What does the term 'Term' mean in credit?

• The amount of money borrowed

• The interest rate charged

• The length of time it will take you to repay the money

• The total amount repaid

What is the usual expression for interest rates?

• Annual Percentage Rate (APR)

• Monthly Percentage Rate (MPR)

• Daily Percentage Rate (DPR)

• Quarterly Percentage Rate (QPR)

Which of the following is NOT a factor that influences interest rates?

• Credit Score

• Amount Borrowed

• Weather Conditions

• Loan Term

What does a fixed interest rate mean for your payments?

• Payments may go up or down.

• Payments will stay the same.

• Payments are based on an index.

• Payments vary with market conditions.

What is required for secured credit?

• Collateral

• No collateral

• High interest rates

• Short terms

What is the role of card networks in credit card transactions?

• They provide credit limits to consumers.

• They facilitate transactions between merchants and card issuers.

• They issue credit cards to consumers.

• They set interest rates for credit cards.

Which of the following is NOT one of the four major credit card networks?

• MasterCard

• VISA

• PayPal

• Discover