Credit

Front

Mark is trying to decide between getting a debit card, a prepaid debit card, and a credit card. Which statement is true?

Back

All 3 cards are completely different.

Front

Which of the following statements comparing credit and debit cards is FALSE? Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard, With debit cards, you're spending your own money at point of sale, but with credit cards, you're getting a loan that you need to pay back later.

Back

Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard

Front

Which of the following is most likely to represent a good debt? A prepaid debit card, An auto loan

Back

An auto loan

Front

Which of these statements best explains why it's often a good idea to pay more than the monthly amount due on an amortized loan? Options: Every time you pay extra, the lender will reduce the interest rate they're charging by a small amount. The extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly. The extra payment will be applied to the interest you owe, which will reduce the overall cost of your loan. Amortized loans typically have much higher interest rates than credit cards, so they're the best place to put your extra cash.

Back

The extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly.

Front

When loans are amortized, monthly payments are (blank), while the amount of your monthly payment is applied to interest (blank) and the amount of your monthly payment is applied to the principal (blank) over time.

Back

constant, decreases, increases

Front

Which of the following is true about fixed and adjustable-rate mortgages? Options: Fixed-rate mortgages have a constant payment every month, but an interest rate that increases throughout the term of the loan. Fixed-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions. Adjustable-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions. The two mortgages work the same way but are called different names depending on if they come from a bank or a credit union

Back

Adjustable-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions.

Front

Jasmine took out a payday loan for $600 in April. By January next year, she could pay back the loan, but she had spent a total of $750 doing so. What’s the most likely story of how this happened?

Back

Payday loans must be paid in full within two weeks, and if not, the only option is to renew the loan for a high penalty fee, which she did approximately 12 times.

Front

Reading through a credit card’s Schumer Box, you see the APR for a specific card is set at 9.99% - 23.99%. Which statement is TRUE?

Back

Your APR will be within that range, depending on the strength of your credit history.

Front

Select the statement below that accurately describes a characteristic of a credit card.

Back

Making full payments on-time every month is the only way to avoid interest charges.

Front

Which of the following statements is CORRECT about secured loans? They are a good choice to use for student loans., If the borrower does not make payments, the lender can repossess the item., In the event of default, the borrower loses nothing except for the down payment., They usually have higher interest rates as compared with unsecured loans.

Back

If the borrower does not make payments, the lender can repossess the item.