Credit Terms
What is the name of the amount of money you are charged to borrow money?
Interest
True or False:
Credit repair companies will do a better job for you if you pay a higher fee.
False
What does APR stand for?
Annual Percentage Rate
What is the amount of money you are charged once per year to have some credit cards?
Annual fee
What is the term for the largest amount of money a credit card company will let you charge on their card?
Credit limit
10 years
Is it required for college students to have a job to get a credit card?
No
What is the period of time after a payment deadline when the borrower can pay back the borrowed money without incurring interest or a late fee?
Grace period
What is the term for the base amount of money you are borrowing (Interest is added to it)?
Principal
Name two of the three credit agencies
Experian, Equifax, Transunion
True or false:
It is a good financial decision to pay only the minimum monthly payment on your credit card each month so you will have more money left over in your budget.
False- You will be paying on the card for a lot longer, and you will pay a large increase in interest
What is an Introductory Rate on a credit card?
A rate much lower than normal that you are given for a short period of time. It is usually given to entice you to sign up for the card, and then the higher rate kicks in later.
What is the name for the number on file with three agencies for each person that lenders go look at to determine if you can borrow money?
Credit score
Which of the following does NOT factor into your credit score?:
Payment history; Total money owed; Monthly expenses
Monthly expenses
True or false:
I will not owe any interest on my credit card if I pay my balance in full every month.
True
How often can you get a free credit report from one or all of the three credit reporting agencies?
Once per year
What is the name for the number that is the actual percentage you pay monthly for your cards/loans, etc.?
Interest rate (Will also take APR)
What does your credit score actually show a potential lender?
a. The dollar amount you owe
b. How reliable you are to pay back what you borrow
c. Your annual income
B- How reliable you are to pay them back
Explain in simple terms how APR works on a credit card on a daily basis.
Something like...Your annual rate is divided up to a daily rate, and you are charged interest on a daily basis. You are not charged on the original total, but interest is charged on the new daily total with yesterday's interest added in.
What is a secured credit card, and why is it used?
It is a card that you load with money ($500-$1000 usually), and then you use it for purchases. People use them to build their credit.