#1
What is the minimum payment requirement on a credit card?
A fixed amount set by the credit card company
ExplanationMinimum payment is a set amount by the credit card issuer.
#2
Which of the following is NOT a type of credit card?
Debit card
ExplanationDebit cards are not credit cards.
#3
What does 'principal' refer to in a loan or credit context?
The initial amount borrowed
ExplanationPrincipal is the original loan amount.
#4
Which of the following is an advantage of using credit cards?
Cashback rewards
ExplanationCredit cards offer cashback rewards.
#5
What is the term for a numerical expression based on a person's credit files to represent their creditworthiness?
Credit score
ExplanationCredit score evaluates creditworthiness.
#6
What is the term used to describe the maximum amount of money a person can borrow?
Credit limit
ExplanationThe maximum borrowing amount is the credit limit.
#7
What is the FICO score primarily used for?
Determining eligibility for credit
ExplanationFICO score assesses creditworthiness.
#8
What is the term for a situation where a borrower fails to make a payment on time?
Default
ExplanationDefault occurs when payment is missed.
#9
Which of the following factors does NOT typically affect a person's credit score?
Income level
ExplanationIncome level does not directly affect credit score.
#10
What is the purpose of a grace period on a credit card?
To provide time to make payments without interest
ExplanationGrace period allows interest-free payments.
#11
What does APR stand for in relation to credit?
Annual Percentage Rate
ExplanationAPR is the annual interest rate on credit.