Basics
Why won't your credit card bill's minimum payment be the same every month?
Because it is based on how much you owe, which fluctuates every month.
What is a "pro" of a good credit score for a loan?
it gives you a lower APR (interest rate)
Which term represents the total cost of the item you’re purchasing on credit minus any down payment you make upfront?
prinicipal
A secured loan typically has a lower interest rate than an unsecured loan. Name a type of unsecured loan.
Personal loan (aka Bank loan) Student loan
Credit Card (unless secured) Payday loan
What is a type of predatory lending we discussed?
payday loans
Where can you acquire a consumer loan or mortgage?
[commercial] banks, or credit unions
A major pro of a fixed rate mortgage is that it makes the loan payment...
predictable
What does APR stand for?
Annual Percentage Rate
This happens if you don't make the minimum payment on your credit card by the end of the grace period?
You will incur a late fee.
(Also, your interest rate may increase; and your credit score will drop.)
What type of credit score is good - low or high?
high
the property involved in a secured loan is called this
collateral
What type of loan has the biggest con of being up to 400% APR or more?
The amount owed on a loan is known as this.
the principal [balance]
How can you avoid paying any interest on a credit card (besides not using it)?
When you pay the balance in full by the due date.
What type of APR is good - low or high?
low
This rate includes the interest rate plus any fees you may be charged.
the APR, or Annual Percentage Rate
When would someone experience more pros than cons with an adjustable rate mortgage (ARM)?
when it will be a short term loan (you'll pay it off or refinance it before the initial fixed rate ends)
The length of time to pay back an installment loan is...
What's probably the biggest danger of not paying your car loan?
It may get repossessed.
If you attempt a debit card charge but you don't have sufficient funds for it to be approved, and you have Overdraft Protection, what will happen?
You'll receive a Non-Sufficient Funds (NSF) fee
Explain a "5/1 ARM"
An adjustable rate mortgage where the first 5 years the rate is locked in, and then it adjusts yearly based on the market/index.
What is the "pro" of paying more than the minimum payment on an amortized loan?
you'll pay less in interest (and pay it off sooner).
This is a type of card that can be used by anyone, regardless of credit history and without the need for a bank account
a pre-paid debit card
What percentage of one's monthly income should be set aside for housing costs and other needs?
50%
The longer the term on a loan, the more _____?
interest you will pay