Honors Financial Institutions and Credit

What is the main difference between a bank and a credit union?

• Banks only provide services to their members.

• Credit unions are owned and controlled by their members.

• Banks offer higher interest rates on deposits.

• Credit unions charge higher fees than banks.

Which financial institution typically charges the highest interest rates on loans?

• Credit Unions

• Title Pawn Lenders

• Banks

• Payday Loan Companies

What is collateral in the context of a title pawn loan?

• A type of loan offered by banks

• A type of interest rate

• An item of value owned by the borrower

• A fee charged by the lender

What does APR stand for?

• Annual Payment Rate

• Annual Profit Rate

• Annual Percentage Rate

• Annual Principal Rate

What is a key advantage of using cash as a payment method?

• It can be easily replaced if lost.

• It is universally accepted and familiar.

• It offers consumer protection.

• It allows for online transactions.

What is a disadvantage of using checks?

• They are universally accepted.

• They are time-consuming to process.

• They are safer to send in the mail.

• They work like cash.

What is a prepaid card?

• A card that allows unlimited spending

• A card with a set amount of money on it

• A card that charges no fees

• A card that is accepted everywhere

What is the purpose of an amortization schedule?

• To compare different types of loans

• To calculate the APR of a loan

• To detail payments on a fixed-rate amortized loan

• To show the total interest paid over the life of a loan

Which of the following is NOT a component of a credit score?

• Payment history

• Debt to income ratio

• Amount owed

• Annual income

Which company is NOT one of the three big credit reporting agencies?

• Experian

• Visa

• Transunion

• Equifax