Budgeting Pre-Assessment 2024

Overdraft occurs when there is not enough money in an account to completely fund a transaction.

• True

• False

In the case of a car crash, the deductible must be paid before repairs can be made to the vehicle.

• True

• False

Using a credit card assists in establishing credit history.

• True

• False

A credit union typically charges a membership fee.

• True

• False

Which is true of overdraft protection (ODP)?

• It is required by law for most accounts.

• It is a free service available for most accounts.

• It can prevent a bank charge for insufficient funds.

• It can prevent an on-line account from getting hacked.

What is the highest credit card utilization you should have if trying to build your credit score?

• 30%

• 60%

• 75%

• 100%

What is the purpose of a 401(k)?

• It is a formula used to determine how much you can spend

• It is used to determine your withholding for income taxes.

• It is a type of account you can invest in for retirement.

• It is a tool to determine how much insurance you will need.

What is the grace period on a bill?

• The time between when the bill is issued and when payment is due.

• The time between when a bill is received and when payment is due.

• The time between when a payment is made and when it is received.

• The time after a bill is due that it can be paid without a late fee assessed.

What is an insurance deductible?

• The total amount of claims or damages the insurance covers.

• The amount the insured must pay before the insurer pays.

• The monthly payment the insurer makes for the insurance.

• A percentage of the cost of the service that the insured pays.

Why is it often best to pay off credit card debt before other types of consumer debt or student loans?

• It is easier to pay off credit card debt than other types of consumer debt or student loans.

• Credit card debt usually has a higher interest rate than other consumer debt or student loans.

• Payments to reduce credit card debt are deductible on a person’s federal income taxes.

• A credit card will be cancelled if the balance is not paid in full at the end of each month.

  Which is the