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$0.01 $1,000 $1 $5,000 24 23 25 $5 22 26 $10,000 $10 $25,000 19 18 20 $25 17 21 $50,000 $50 $75,000 14 13 15 12 16 $75 $100,000 $100 $200,000 9 8 10 7 11 $200 $300,000 $300 3 4 $400,000 2 5 $400 1 6 $500,000 $500 $750,000 $700 $1,000,000
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BANK OFFER…
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YOU HAVE WON…
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Explain how credit was first used during the 1800s.
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SEE TEACHER 1
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$400,000 BANK OFFER
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True/False: The three main types of credit are Open-ended, Closed-ended, and Service.
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True 2
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True/False: If you buy an item but are not billed until later, you are using deferred billing
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TRUE 3
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$1 BANK OFFER
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The principal you pay on a loan plus the interest is called the ??
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Balance Due 4
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$1,000,000 BANK OFFER
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Name two disadvantages of using credit.
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Finance Charges - Overspending Bankruptcy - Ties up Future Income
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$25 BANK OFFER
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Define collateral. 6
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Property pledged to a lender to ensure that you will pay your loan
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$300,000 BANK OFFER
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Explain what a “minimum payment” is.
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The smallest amount you must pay on your credit card each month
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What are the two types of Open-Ended Credit?
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30-Day Credit Revolving Credit
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$100 BANK OFFER
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What did usury laws do? 9
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They set a maximum interest rate that can be charged on loans.
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$25,000 BANK OFFER
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When a consumer agrees to pay the full balance of their credit each month, they are using what type of credit? 10
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30-Day Credit 10
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This is a pre-determined amount of money that can be borrowed on demand without using collateral.
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Line of Credit 11
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$1,000 BANK OFFER
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This is money borrowed against your credit limit.
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Cash Advance 12
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$75,000 BANK OFFER
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True / False: Loan sharks are licensed lenders who illegally charge high interest rates on loans.
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FALSE - UNlicensed 13
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$200 BANK OFFER
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What is the most common source of cash loans?
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Private Lenders 14
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$50 BANK OFFER
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The person loaning money is known as the what?
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Creditor 15
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The person borrowing money is known as the what?
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Debtor 16
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What are two examples of service credits?
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Telephone bill, hospital bill, utility bill, repairs, lawyers, dry cleaners
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$50,000 BANK OFFER
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What is capital? 18
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Property you own that is worth more than your debt
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$0.01 BANK OFFER
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Why do credit unions charge lower interest rates on a loan than a bank would?
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They give loans to their members who are already established and associated with the credit union.
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$200,000 BANK OFFER
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What are two advantages of using credit?
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20 Expands purchasing power - Convenient
Emergency Funds - Proof of payment 20
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$300 BANK OFFER
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Explain what repossession means.
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When you don’t pay a loan but have collateral, the lender will repossess (take) the collateral as payment for the loan. 21
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$5,000 BANK OFFER
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What are three sources where you can obtain credit.
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Retail Stores, Credit Card companies, Banks, Credit Unions, Finance Companies, Pawnbrokers, Private Lenders, Life Insurance 22
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This loan uses the goods purchased with the loan as collateral
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Secured Loan 23
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An agreement where borrowers can borrow up to a stated limit and continue to borrow to that limit if the balance ever falls below the limit 24
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Open-Ended Credit 24
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$500 BANK OFFER
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This loan allows you to take out a particular amount of money and repay it in fixed payments
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Installment Loans 25
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$10 BANK OFFER
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For this type of credit you can either pay the full amount or make payments as large as the minimum payment each month 26
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Revolving Credit 26
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$10,000 BANK OFFER
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