Chapter 2: Credit & Debt Chapter Assessment

A fee that a bank, credit card, or other lender charges for the opportunity to purchase something and pay for it over time is called:

Interest

Car loans are just a way of life. You will always have a car payment. a. True b. False

b. False

On average, how much of a person's take-home pay is sent back out for debt payments?

c. 25%

Which of the following is not one of the ways that the federal Fair Credit Reporting Act of 1970 protects consumers? a. The accuracy of the credit report b. The privacy of the consumer c. The financial goals of the consumer d. The fairness of credit reporting

c. The financial goals of the consumer

The federal Fair Debt Collection Practices Act of 1977 dictates how: a. Much debt a person is allowed to carry b. Much interest a lender can charge c. Debt collectors can interact with individuals d. Much ofa debt a person must repay

Debt collectors can interact with individuals

When you buy things with cash, you will always pay more for the things you buy. a. True b. False

False

Describe the impact that debt can have upon a family's budget.

It can take everything away from you.

Which of the following describes the best way to buy a car?

Save up and pay cash for a used car in your price range

The FICO score measures all of the following except: a. Debt history b. Savings account balance c. Types of debt d. New debt

Savings account balance

On average, over 70% of college students graduate with student loan debt. a. True b. False

True

Staying away from car payments by driving reliable used cars is what the typical millionaire does. a. True b. False

True