Principal
Something that credit card commercials don't show you is . . .
A. People making payments for months or years on those credit card purchases
B. How much your credit score will grow right away
C. How happy your parents will be that they don't have to lend you cash anymore
D. How great your life will be with payments
A. People making payments for months or years on those credit card purchases
A car is a depreciating asset.
A. True
B. False
A. True
Your greatest tool to building wealth is ...
A. Tax cuts
B. Single stocks
C. Your income
D. Your credit score
C. Your income
There are certain things, like renting a car or booking a hotel room, that you cannot do without having a credit card.
A. True
B. False
B. False
What is The Second Foundation?
A. Get out and stay out of debt.
B. Save a $500 emergency fund.
C. Pay cash for your car.
D. Build wealth and give.
A. Get out and stay out of debt.
Making purchases with a credit card means that you're borrowing money with interest, and ________ pay much higher interest rates.
A. Young people
B. Rich people
C. Old people
D. College graduates
A. Young people
When a homeowner takes out a home equity line of credit (HELOC), that loan can only be used for home repairs and renovations.
A. True
B. False
B. False
Banks and lenders use credit scores to determine . . .
A. The likelihood that someone is able to repay debt
B. A person's financial responsibility
C. How much collateral someone has available to put up for a loan
D. How successful someone is
A. The likelihood that someone is able to repay debt
____________ require the borrower to put up collateral for the loan.
A. Unsecured loans
B. Interest rates
C. Revolving credit
D. Secured loans
D. Secured loans
Once you turn 18, you should regularly check your credit report . . .
A. For errors or signs of identity fraud
B. To make a plan for improving your credit score
C. To keep an eye on your credit score
D. Only if you have a credit card
A. For errors or signs of identity fraud
Which of the following is part of the formula that determines a person's FICO score?
A. Their income level during a one year period
B. The percent of income that they invest into
mutual funds
C. The dollar amount in their savings funds
D. Their history of payments made to lenders
D. Their history of payments made to lenders
Leasing a car is a method of financing where someone ___________
A. Makes monthly payments on but does not own the vehicle
B. Is paying off two or more vehicles at one time
C. Does not have to pay any taxes on the vehicle for the first six months
D. Never pays any interest or fees
A. Makes monthly payments on but does not own the vehicle
Which is an example of an appreciating asset?
A. A computer used for business purposes
B. A new car purchased within the past 6 months
C. A piece of farming equipment
D.A home
D.A home
Credit cards that offer flashy rewards like airline miles often . . .
A. Charge a high annual fee
B. Don't include protection against fraud
C. Can't be used for personal expenses
D. Have no interest fees
A. Charge a high annual fee
Car lease agreements come with a stipulation that you must pay a penalty if you _________
A. Go over the pre-established mileage cap
B. Drive the car out of state
C. Don't park under a garage
D. Don't wash the car before returning it
A. Go over the pre-established mileage cap
The debt snowball method involves . . .
A. Waiting until the winter months to begin
paying off debt
B. Paying off debts from largest to smallest
C. Pooling together money from other people to pay off your debt
D. Paying off debts from smallest to largest
D. Paying off debts from smallest to largest
Credit card companies make the most profit from ________
A. Incentive programs with banks
B. Partnering with companies to offer rewards to customers
C. Government tax breaks
D. Charging interest to customers who only pay part of their monthly debt
D. Charging interest to customers who only pay part of their monthly debt
The smartest way to buy a car is to _________
A. Lease it
B. Finance it but pay the debt as quickly as you can
C. Take out a personal loan for it
D. Pay for it in cash
D. Pay for it in cash
What is the best way to avoid falling into debt?
A. Use credit to pay for large expenses now so that you have plenty of time to pay it off.
B. Only buy things that you can purchase with cash.
C. Use airline miles earned through a credit card to help pay for a vacation.
D. Take out a small loan for any purchases over $1,000.
B. Only buy things that you can purchase with cash.
Credit isn't a wealth-building tool, it's a business that makes money for . . .
A. Individuals who use credit cards
B. Stock market investors, tax agencies, and financial advisors
C. Local businesses and home builders
D. Credit card companies, banks, and lenders
D. Credit card companies, banks, and lenders
When looking over your credit report, it's important to make sure . . .
A. No lines of credit have been opened under your name without your knowledge
B. Your credit score is over 700
C. At least five businesses have requested your credit report
D. The information listed is over 10 years old
A. No lines of credit have been opened under your name without your knowledge
Predatory lenders get their negative reputation from . . .
A. Limiting the amount of time a borrower has to use a loan
B. Taking advantage of people during the Great Depression
C. Charging high fees for loans and targeting desperate people
D. Discreetly selling personal bank information
C. Charging high fees for loans and targeting desperate people
Credit card companies charge stores a 2–3% fee for every purchase made with credit cards. This is called a(n) . . .
A. Merchant fee
B. Cash advance fee
C. Annual fee
D. Over-the-limit fee
A. Merchant fee
The ________is the total amount of the car loan, plus taxes and fees.
A. Principal
B. Value
C. Interest
D. Term
A. Principal
How you spend and give your money . . .
A. Can't be changed, even if you try
B. Is the most important thing in life
C. Is a reflection of your personal values
D. Doesn't matter until you're in your 40s
C. Is a reflection of your personal values