Credit Card Basic
Loan Types
Amortization
Credit Behavior
Credit Report Basics
Managing
Credit
Credit
100
What is the primary difference between debit and credit cards?
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.
100
Which is most likely a fixed-rate, secured debt?
A student loan
A credit card
A prepaid debit card
An auto loan
An auto loan.
100
Why pay more than the monthly amount on an amortized loan?
The extra payment will be applied to the principal amount you owe, which will pay down your debt
100
Duc has a $1000 limit and $800 balance; what can he spend now?
$200
100
Who tracks all of your credit information?
Credit reporting agencies (Equifax, Experian and TransUnion).
100
What are the two most important factors in calculating your credit score?
Payment history and total debt.
200
What is true about debit and prepaid debit cards?
Debit cards and prepaid debit cards are the same
200
What is true about secured loans?
If the borrower does not make payments, the lender can repossess the item.
200
When loans are amortized, monthly payments are , interest portion , principal portion over time?
Constant, Decreases, Increases.
200
An excellent credit score helps you with which aspect of car financing?
Qualifying for a low interest rate.
200
What should you have ready when contacting a credit reporting agency to report an error?
An explanation of the mistake and any evidence you have supporting your claim.
200
Which strategy would NOT be beneficial if Heather wants to pay off debt quickly?
Reducing spending by canceling some of her streaming subscriptions
Taking extra shifts at work to increase her income
Making more than the minimum required payment on her debt
Applying for another credit card to use in case she runs out of cash paying off her debt
Applying for another credit card to use in case she runs out of cash paying off her debt.
300
What does the disclosure "Your due date is at least 25 days..."
The 25 days after the end of the billing cycle is referred to as the grace period.
300
What is true about shorter-term loans versus longer-term loans?
A loan with a shorter term length will have higher monthly payments, and you will pay less in total interest.
300
If lowest monthly payment is top priority for a $35,000 car and $5,000 down, what should Taylor do?
Put in $5000 for your down payment, and choose a loan with a long term length.
300
Which could have a negative impact on your credit score if done in a short period of time?
Paying your bills on-time
Paying down balances on your credit card accounts
Decreasing your utilization of credit
Applying for multiple credit cards
Applying for multiple credit cards.
300
Reviewing a partial credit report, what does a 30-day late status indicate?
This borrower was 30 days late on their May 2015 payment.
300
How can your credit score impact your financial well-being?
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be.
400
What is a FALSE statement about avoiding credit card interest?
Making full payments on-time every month is the only way to avoid interest charges.
400
What could happen according to the Schumer Box about penalties? 
A 28.99% APR may be applied to your account for late payment.
400
Which is GOOD advice if you’re struggling to make auto loan payments?
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
Find an extra source of income by taking a second job, working longer hours, or borrowing from family if they can afford to help.
400
Which statement is an inaccurate characteristic of credit cards?
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
You must have money deposited into a checking account to use the credit card for purchases.
400
Which of the following would NOT show up on a credit report?
Salary of your current job
Payment history of your car loan
Credit card payment history
Student loan activity
Salary of your current job.
400
If Frank has a 730 score and Jasmere 600 for identical loans, who likely pays more monthly?
Jasmere's monthly payment on the loan will be about $100 more than Frank's
500
Which payback strategy leads to the HIGHEST overall cost?
Paying off your credit card bill in full every month
Paying 20% of your credit card balance every month on time
Making the minimum payment (3% of your credit card balance) every month on time
Making the minimum payment (3% of your credit card balance) every month with an occasional late payment
Making the minimum payment (3% of your credit card balance) every month on time.
500
Which is the WORST advice when you’re having trouble making auto loan payments?
Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control.
500
Which option would NOT minimize monthly payments?
Put in $0 for your down payment, and choose a loan with a short term length
Put in $2500 for your down payment, and choose a loan with a short term length
Put in $3500 for your down payment, and choose a loan with a long term length
Put in $5000 for your down payment, and choose a loan with a long term length
Put in $0 for your down payment, and choose a loan with a short term length.
500
Which strategy leads to the HIGHEST overall cost? (Includes late fees and higher interest.)
Paying off your credit card bill in full every month
Paying 20% of your credit card balance every month on time
Making the minimum payment (3% of your credit card balance) every month on time
Making the minimum payment (3% of your credit card balance) every month with an occasional late payment
Making the minimum payment (3% of your credit card balance) every month with an occasional late payment.
500
Which of the following would show up on a credit report?
Salary of your current job
Payment history of your car loan
Credit card payment history
Student loan activity
Payment history of your car loan.
500
Which strategy minimizes total interest paid over time when paying multiple debts?
Snowball method
Make minimum payments
High rate method
Consolidate multiple debts into one new loan
High rate method.