Which one?
You take a credit card loan of $10,000. Is it better to pay for 6 months with 5% interest rate OR for a year with 7% interest rate?
Use a credit card calculator
A year with 7% interest rate
If Correct: +$100
If Incorrect: -$100
Name this term:
A type of credit that allows you to borrow, repay, and borrow again up to a set limit, like a credit card.
Revolving Credit
If Correct: +$100
If Incorrect: -$100
You run to the grocery store and spend $80. Would you use credit / debit card?
debit card
If Correct: +$100
If Incorrect: -$100
How do extra payments affect amortization payments regarding principal balance?
Extra payments go directly towards reducing principal balance.
If Correct: +$100
If Incorrect: -$100
True / False
Your credit card score has no impact on the interest rate of your credit card
False- A higher credit score usually gets you a lower interest rate
If Correct: +$100
If Incorrect: -$100
Which has a longer payoff term?
$12,000 loan with 6% interest rate with $200 monthly payment OR $350 monthly payment with 8% interest rate?
Use a Credit card calculator
$200 monthly payment with 6% interest rate
If Correct: +$200
If Incorrect: -$200
Name this term:
The Initial sum of money a borrower receives from a lender
Loan Principal
If Correct: +$200
If Incorrect: -$200
You want to buy a boat and you don't have enough money to pay the full amount right now. Which one should you use: credit / debit card?
credit card
If Correct: +$200
If Incorrect: -$200
If you pay extra payments on amortization loan, what will happen to the interest?
interest will be reduced
If Correct: +$200
If Incorrect: -$200
True / False
A lower interest rate always means you will pay less money overall
True
If Correct: +$200
If Incorrect: -$200
Which one has the lower interest?
A mortgage loan of $450,000 with down payment of $100,000 for 30 years at 7% interest rate OR with down payment of $150,000 for same term and interest rate?
Use mortgage calculator
Down payment of $150,000
If Correct: +$300
If Incorrect: -$300
Name this term:
The percentage of cost of borrowing money, or the percentage return earned on savings or investments.
Interest rate
If Correct: +$300
If Incorrect: -$300
You and your friends go to lunch. Your bill is $20. Would you use credit / debit card?
debit card
If Correct: +$300
If Incorrect: -$300
Even if you do an extra, small payment, can the total interest and length of the loan be lowered?
Yes
If Correct: +$300
If Incorrect: -$300
True / False
A shorter loan term usually means lower monthly payments
False - Shorter terms usually have higher monthly payments but less interest overall
If Correct: +$300
If Incorrect: -$300
Which one has the lower interest?
A mortgage loan of $1,000,000 with down payment of $200,000 at 7% interest rate for 30 years OR for the same interest rate and down payment but with 15 years loan term?
Use mortgage calculator
30 years loan term
If Correct: +$400
If Incorrect: -$400
Name this term:
A set period of time with a fixed or variable interest rate for the loan repayment schedule.
Term
If Correct: +$400
If Incorrect: -$400
In order to pay off your student loans, you have a monthly payment of $150 for 2 years. You have it set up to pay them automatically at the end of each month. Which card would you be using: credit / debit ?
credit card
If Correct: +$400
If Incorrect: -$400
If you struggle to budget, would it benefit you to have fixed payments or variable payments?
fixed
If Correct: +$400
If Incorrect: -$400
True / False
Balance transfers are always free
False - Most credit cards charge a balance transfer fee
If Correct: +$400
If Incorrect: -$400
Which one is better?
Buy a car with a loan of $15,000 for 5 years term at 6.5% interest rate OR for 3 years loan term at 8% interest rate?
Use amortization calculator
3 years loan term at 8% interest rate
If Correct: +$500
If Incorrect: -$500
Name this term:
The part of the contract that spells out restrictions, limitations, or other details that are not immediately obvious in the main body of agreement.
Fine print
If Correct: +$500
If Incorrect: -$500
You forgot your wallet at home, when going out with a few friends, so your friend paid for your tickets. You used Venmo to pay her $25 back. Which card was better to use: credit / debit?
debit card
If Correct: +$500
If Incorrect: -$500
What is an amortization schedule?
A table that shows the breakdown of each payment, showing how much goes towards the interest and principal per payment period.
If Correct: +$500
If Incorrect: -$500
True / False
A "grace period" means you won't pay interest if you pay your full balance on time
True
If Correct: +$500
If Incorrect: -$500