Building Credit
The following financial products will help you build a credit history EXCEPT... 1) Debit card; 2) Secured credit card; 3) Home mortgage; 4) Credit card
What is Debit card?
How could you raise your credit score?
An advantage of using a credit card.
What is paying for emergencies? Or phone or online orders? Or safer than carrying cash? Or can dispute charges, if necessary?
It requires collateral, in the form of assets like a car or home to be exchanged for the loan.
What is a secured loan?
The cost that borrower pay for using someone else's money.
What is interest?
TRUE OR FALSE: With debit cards, you're spending your own money at point of sale, while with credit cards, you're promising to pay back the money eventually
What is TRUE?
TRUE OR FALSE: It's often a good idea to pay more than the monthly amount due on an amortized loan because the extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly.
What is TRUE?
A disadvantage of using a credit card.
What is overspending and getting into debt? Or high cost (interest)?
The total amount of money that a person owes.
What is debt?
What's the acronym for when you borrow money against the house you're already living in?
HELOC
T or F. 550 is a good credit score?
False
When loans are amortized, monthly payments are _, while the interest portion of the monthly payment _ and the principal portion of the monthly payment _ over time.
What is Constant, Decreases, Increases?
Why do banks want you to sign up for a credit card?
Interest payments on unpaid balances
Name of a person who signs a loan application alone with a borrower.
What is a co-signer?
The period of time when you make the minimum payment or pay in full - usually 25 or 30 days - and the credit card company will not charge you interest.
What is the grace period?
TRUE OR FALSE: Debit cards allow you to draw funds directly from your checking account.
What is TRUE?
Describe one possible credit card reward
Cash Back, Miles, Nights, etc.
What's on a credit report?
Answers Vary
The lowest amount possible that a credit card user is required to pay per month.
What is a minimum payment?
What's the word for how banks make money on interest? Money they collect minus money they give out.
Spread
What is the worst and best possible credit scores?
300 and 850
Name a a major credit reporting agency?
What is Experian? Or TransUnion? Or Equifax?
You see on a commercial that OrangeCo is offering a credit card with a 5% cashback program for all cardholders. What is ONE question you might ask to evaluate how good this offer is?
What is "Does the cashback program apply to all purchases or only specific types of purchases like gas and groceries?
Financial institution that often charges less than banks for loans.
What is a credit union?
What's an average credit card interest rate? + or - 3%
21%