Money Vehicle 5.2

What is one characteristic of credit cards that makes them both enticing and potentially risky?

• Give you more money back then you spend.

• Give you access to investment choices you wouldn't otherwise have.

• Allow you to buy things without ever paying for them.

• Allow you to buy things before you have the cash to do so.

What is the reason behind Credit Companies being able to impose high interest rates?

• Because you are paying down an unsecured loan.

• Because they add that much value.

• Because they are in it to make money.

• Because you are paying down a secured loan.

How would you define the concept of the Credit Trap?

• Anytime you use your credit card.

• Anytime your purchase is paid for with less money than you thought.

• Anytime your purchase ends up costing more than you thought.

• Anytime your purchase ends up getting lost on delivery.

Your credit company contacted you and informed you that despite having a $100 outstanding balance on your credit, you are only required to make a payment of $3 for this month. What is the term used to describe this $3 payment?

• Minimum credit allowance.

• Minimum allowance deposit.

• Minimum automatic payment.

• Minimum amount due.

What is the approximate percentage of your outstanding credit balance that is typically required as the minimum amount due?

• 1-3%

• 10-20%

• 30-50%

• 100%

Which of the following is an advantage of using a credit card?

• Ability to earn rewards or cashback on purchases.

• Unlimited spending without any consequences.

• Immediate deduction from your bank account.

• Incurring high-interest rates on unpaid balances.

What is the name of the federal bill that provides protection against personal liability for fraudulent activities on your credit card?

• Fair Reporting of Credit Act

• Fair Credit Billing Act

• Electronic Funds Transfer Act

• Electronic Fair Transfer Act

Harper informs her friend that she receives a complimentary flight every year as a result of her credit card management. What is Harper referring to?

• The rewards from her credit card gives her for using the card.

• The insurance that her credit card provides her for flights.

• The idea that she buys the flight on credit and not cash.

• The trick she uses where she pushed her purchase onto 6 cards at once.

Adrian made the minimum amount due (MAD) payment this month, but he is still being charged interest! How can this be possible?

• Because he did not pay with his credit card.

• Because he did not pay the MAD automatically.

• Because he did not pay off the entire balance.

• Because he did not have enough money in his Checking Account.

What is the consequence of carrying a high amount of credit card debt?

• Increased credit score

• Lower interest rates

• Accumulation of interest charges

• Improved financial stability