Credit Cards & Spending Habits
Plastic payment tool that lets you borrow to make purchases, charging high interest if unpaid.
What is a credit card?
Money borrowed and repaid with interest.
What is a loan?
Borrowed money to pay for college costs.
What is a student loan?
Paying smallest debt first, then applying those payments to the next smallest.
What is the debt snowball method?
Banks and lenders use credit scores to determine . .
What is The likelihood that someone is able to repay debt
The maximum amount a credit card company lets you borrow.
What is the credit limit?
The original amount borrowed before interest or fees.
What is principal?
Temporarily pausing loan payments after graduation is called this.
What is deferment or forbearance?
A detailed income-and-expenses plan to free up money for debt payoff.
What is a budget?
The following is part of the formula that determines a person's FICO score...
Their history of payments made to lenders
The minimum sum required monthly to avoid late fees, but keeps you in debt longer.
What is the minimum payment?
The is the total amount of the car loan, plus taxes and fees
What is Principal
Money for college that doesn’t have to be repaid.
What are scholarships or grants?
Taking on extra work to pay off debts faster.
What is increasing income or side hustle?
A home is an example of an ______________ asset.
What is appreciating
This type of interest is calculated not just on what you borrowed, but also on previous interest charged.
What is compound interest?
Extra money you pay to borrow funds.
What is interest?
Alternative to loans where you earn money during school to pay expenses.
What is working part-time or work-study programs?
The ultimate goal after applying debt strategies.
What is financial freedom?
True or false- A car is a depreciating asset
True
Buying items you didn’t plan for, often influenced by emotions or marketing, is called this.
What is impulse buying?
Loan type that doesn’t require collateral but often has higher interest.
What is an unsecured loan?
Many borrowers take more than this many years to pay off student loans.
What is 20 years?
Selling unused items to gain extra money toward debt.
What is selling possessions?
Credit card companies charge stores a 2–3% fee for every purchase made with credit cards. This is called a(n)....
What is Merchant Fee