Chapter Assessment - Financial Literacy - أول ثانوي

وزارة التعليم Chapter 5 Assessment SUMMARY 5.1 ⚫ Credit is the ability to borrow money with the agreement to pay it back later, usually with a fee ⚫ Types of credit available to consumers include credit cards, charge cards, consumer loans, and service credit. 5.2. Credit is used for a variety of reasons and, if used wisely, provides many benefits. However, credit can lead to financial difficulty if not used carefully. ⚫ Advantages of credit are increased purchasing power, security, con- venience, leverage, and special benefits such as rewards. ⚫ Disadvantages of credit are the finance charge on items purchased. the decreased ability to spend in the future, the tendency to over- spend, and the risk of identity theft. 5.3. Credit card fraud is a common form of identity theft. It can occur when victims use unsecured websites, or when thieves use lost or stolen credit cards, data, or skimming devices. • Identity theft occurs when someone uses your personal information without your permission to commit fraud or other crimes. . It is important to understand the process to protect your personal. data if you have been a victim of identity theft, in order to minimize future disruption. 168 CHAPTER 5 Assessment

KEY TERMS For each lesson, match the terms listed with their definitions. Write the letters of the correct definitions. Lesson 5.1 Term 1 Annual parcentage rate 2 Bonower 3 Charge card 4 Consume loan 5 Credit 6 Credit card 7 Debt 8 Lendle 9 Mada card 10 Service Credit Your choice Definition a an organization or person who gives money to someone ele b a type of credit card for which the cardholder must pay the balance in full by the due date ca company or individual who takes money from someone else d the ability to lorrow money and pay it back later e a debit card issued by local bunks that allows & Cardholder to access funds in their current account f the loan provider purchases assets for the wusume and sells the assets back to them at a profit after a selipered of time g the cost of the credit extended to the consumer by the bank h a plastic card linked to a credit account that can be used to make purchases i the ability to receive services and pay for them later i money that must be repaid Lesson 5.2 Term 1 Credit score 2 Fee وزارة التعليم 27-1985 Your choice Definition a a margin above the costs that allows the borrower to repay in instalmenta b a tool used by lenders to help determine whether you qualify for a particular credit card, lan, mortgage br service CHAPTER 5 Assessment 169

Lesson 5.3 Term 1 Credit card fraud 2 Scar 3. Skimming 4 Spam Your choice Definition a a deceptive scene or trick used to cheal someone out of something binelevant or unsolicited messages sent to a large number of internet uners c stealing another person's credit card details using electronic equipment d intentionally using another person's credit account to steal money or goods صرارة العبور PROBLEMS 1. What is the purpose of credit? Explain your answer. 2. Identify and explain one main feature of a credit card. 3. Identify and explain one difference between credit cards and charge cards. 170 CHAPTER 5 Assessment

4. Does credit provide consumers with more or less leverage than cash? Why? 5. Explain what is meant by a fee. 6. How does credit reduce a consumer's future buying power? 7. Explain why freezing your credit card is important when you find you have been a victim of credit card fraud. 8. Identify and explain one way in which thieves are able to obtain con- sumers' credit card information in order to commit fraud. وزارة التعليم 27-1585 CHAPTER 5 Assessment 171

ورارة العالبحر EXERCISES Choose the correct answer. 1. A person who takes money temporarily from a bank or financial institution is called a borrower. a. true b. false 2. Which of the following is NOT an appropriate step in preparing your self for a credit card? a. opening a current account b. managing your account carefully c. having no income d. having a steady source of income 3. Which of the following is NOT an example of a credit benefit? a. amount of credit available b. a better paying job c. lower cost of fees d. amount of products offered 4. There are no disadvantages when using credit. a. true b. false 5. A Mada card is a credit card. a. true b. false 6. Which of the following is NOT a benefit available to credit card holders? a. points b. cashback c. no fees d. airline miles 172 CHAPTER 5 Assessment

7. Which of the following is unlikely to lead to credit card fraud? a. losing a credit card b. being a victim of skimming c. using a website with a URL starting with https:// d. throwing away statements without destroying them 8. Which of the following will NOT help prevent credit card fraud? a. carrying only the cards you need b. notifying lenders as soon as you discover a card is lost or stolen c. giving your card to a person who takes it into a back room d. learning the features of credit card apps 9. The first step after discovering you are a victim of fraud is to call the fraud department of your credit issuer. a. true b. false وزارة التعليم רש CHAPTER 5 Assessment 173

وزارة التعليم MINI CASE Yasser's Vehicle Leasing Business Yasser has noticed that the money in the business bank account does not match the amount of money received by his customers. He is worried he may have been a victim of fraud. 1. What is the first thing that Yasser could do? Upon further investigation, Yasser has identified payments to an unknown supplier for products he has not received. When he checks the website, the URL does not start with https://. 2. What would you advise Yasser to do next? Due to the fraud, Yasser does not have enough cash in his bank account to pay his expenses. He must apply for credit in order to avoid becoming insolvent. 3. What type of credit should Yasser apply for? 174 CHAPTER 5 Assessment