Personal Finance Banking, Credit, Insurance Review

What is an insurance premium?

• Your monthly payment to your insurer, regardless of whether you use any services

• A list of the procedures covered by your insurance carrier

• An added cost you pay in order to receive higher-quality services

• The amount you pay out-of-pocket for a specific procedure or service

Which term refers to the percentage of covered medical expenses you are responsible for paying after your deductible is met?

• Deductible limit

• Premium

• Out-of-network fees

• Co-insurance

Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?

• Regular savings account

• Money Market account

• Checking account

• Certificate of Deposit

All of the following are true about prepaid cards EXCEPT…

• Prepaid cards typically include a lot of fees

• Prepaid cards are a useful option for someone who is unbanked to make online purchases

• Prepaid cards are a great way to build credit

• Prepaid cards are usually accepted anywhere that debit and credit cards are accepted

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? Mark only one oval.

• 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

If you are having trouble making auto loan payments and are really following a tight budget, which recommendation below represents the WORST advice? Mark only one oval.

• Find an extra source of income by taking a second job, working longer hours, or borrowing from family if they can afford to help

• Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control

• Continue making all payments and call your lenders and see if you can negotiate lower monthly payments, lower interest rates, or longer terms

• Explore whether a free or non-profit credit counseling service could help

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? Mark only one oval.

• When given a range of APRs like this, you can assume most cardholders pay the lowest rate listed

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

• In this case, you want the highest APR in the range because you’ll earn more

• The APR on credit cards is usually fixed, so it won't be adjusted as long as you are a cardholder

What is an advantage of using a credit card? Mark only one oval.

• It will not affect your credit score or credit history

• Since it is tied directly to your checking account, it prevents you from spending money you do not have

• If you need to carry a balance, the interest rates are generally quite low (less than 5%)

• You can make an emergency purchase that you otherwise don’t have the money to pay for right now

Select the statement below that accurately describes a characteristic of a credit card. Mark only one oval.

• You owe the same payment every month

• You must have money deposited into a checking account to use the credit card for purchases

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

• They do not charge interest

An excellent credit score will help with which aspect of car financing? Mark only one oval.

• Bargaining for a great sales price

• Receiving a large down payment

• Qualifying for a low interest rate

• Having a wide selection of term lengths