Interest and APR
What does APR stand for?
Annual Percentage Rate
Does bankruptcy leave a mark on your financial record?
Yes
What is revolving credit?
Credit cards that allow you to borrow repeatedly up to a limit and pay it back over time.
How can lenders manipulate consumers?
Lenders can trap borrowers in cycles of debt by targeting those in need to cash.
What is on a credit report?
A credit report is a detailed history of your accounts, balances, payment history and public records.
Will you pay more or less if you always pay the minimum monthly payment?
More.
What is the snowball strategy?
Paying off your smallest balances first.
What is the biggest form of credit debt that young people normally deal with?
Student loans.
What laws are in place to prevent lenders from being discriminatory?
Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA)
What is one reason you should check your credit report regularly?
You should monitor your credit report regularly to see catch if you have had your identity stolen so you can do something about it immediately.
What will your final payment be if you take out a $1,000 loan with a 10% interest rate?
1,100
What is the debt avalanche strategy?
focusing on the highest-interest debts first to save maximum money
What is buy now, pay later?
Usually found in store cards, options like After play or Klarna that split small purchases into short term installments.
What is the difference between secured and unsecured credit?
Secured credit has collateral behind it, while unsecured credit is based on your credit score and history.
What is something that can happen if you don't check your credit report often?
Identity theft
What is interest?
The basic charge for borrowing the principal.
What is one possible consequence for ignoring debt?
Your credit score is lowered.
How can putting things on credit add up?
Interest accrues on credit purchases, making you pay more over time. Small payments used through credit can add up fast.
Why do lenders look at your credit score?
Lenders want to know if you are trustworthy or have a history of paying back your fees on time and in full.
How can you safeguard your financial safety?
You can place a free credit freeze with the three major credit bureaus (Equifax, Experian, and TransUnion)
How does interest make borrowing more expensive?
The interest cost adds up over time, making you pay more.
Is bankruptcy an easy way to get out of debt fast?
No.
How does your credit score impact your life?
Lenders, employers, and landlords all look at your credit score to decide whether they should rent to you and how high your interest should be?
What are examples of predatory financial services?
Payday loans, rent to own, title loans.
How can you get your credit report for free?
You can check completely for free at AnnualCreditReport.com.