Interest Rate Showdown
What does APY stand for?
Annual Percentage Yield
Can payday loans affect your credit?
Yes, if unpaid or sent to collections
What’s the best way to avoid credit card interest?
Pay the full balance every month
You’re offered a job that pays $16/hour. You work 20 hours/week. What’s your monthly income (before taxes)?
$1,280
What’s property tax?
A tax paid by homeowners based on home value
You borrow $10,000 at 6% for 10 years. How much total interest?
$6,000
What’s a rollover loan?
Extending a payday loan for another term — with more fees
If your APR is 20% and you carry a $500 balance, how much interest do you pay in a year?
$100
What’s one fixed expense most college students have?
Rent (or tuition)
What’s one recurring cost for renters?
Rent
Is 10% APR better or worse than 5% APR?
Worse (higher cost)
True or False: Payday loans are cheaper than credit cards.
False
Is interest charged on purchases immediately?
No, not if you pay off the full statement balance before the due date
What’s one variable expense most college students have?
Food, gas, entertainment
What’s one recurring cost for homeowners?
Mortgage, insurance, property taxes
True or False: The longer the term, the more interest you pay.
True
What’s a better solution than payday loans in a cash emergency?
Borrowing from a friend/family or campus emergency aid
What’s a grace period on a credit card?
Time between purchase and due date when no interest is charged
You spend $50/week on fast food. How much is that in a month?
$200
What’s equity in a home?
The portion of the home you own outright
What grows faster: 5% interest compounded monthly or annually?
Monthly
Payday lenders often require...
Proof of income and bank account access
True or False: Closing an old credit card helps your credit score.
False
True or False: A subscription is a variable expense.
True
What’s a lease?
A rental contract