Credit & Debit Card quiz

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How are credit cards and debit cards different?

A credit card can offer perks such as purchase protection

How are a credit score and credit report related?

A credit score is determined by the factors in your report

which is FALSE about what can happen if you fail to make your mortgage payments?

After one missed payment, you can lose your home

How do you avoid paying interest on your credit card (or any other loan for that matter)?

Always make the full payment on time

What information on a Schumer Box should you focus on when choosing a credit card? (hint: choose 3 correct answers)

Annual Percentage Rate (APR) Grace Period Fees

Which of the following could be a SECURED loan? (hint: choose 2 correct answers)

Auto loan Mortgage

If the collateral for your secured loan can be taken away, why get a secured loan at all?

Because they usually have a lower interest rate

How can you build a positive credit history as a college student?

Become an authorized user on an adult's card

Which of the following situations is an example of responsibly taking on debt?

Become an authorized user on an adult's card

What can debt collectors do if you don't make payments towards your loans?

Call you between 8am-9pm to talk to you about your loans

All of the following may access your credit report EXCEPT...

Colleges and universities

Jim is 23 and has 1 credit card. What would be the best way to improve his credit score? (hint: choose 2 correct answers)

Diversify his credit - get an loan for the car he needs Make sure he makes his payments in full & on time MORE

Which types of debt usually CANNOT be erased or reduced?

Federal student loans

Where do banks get the money to lend out to consumers?

From their clients' savings accounts

When can personal loans be a better option than credit cards? (hint: choose 2 correct answers)

If you want a lower interest rate & If you need a lump sum of money right away

What information can you find on a credit report?

Inquiries you've made on new lines of credit

How can having a thin file impact you?

Lenders may decline your application for a loan

Aisha wants to improve her credit utilization rate. Which of the following can she do? (hint: choose 2 correct answers)

Make several payments in the month instead of a large one Spread her spending among her 3 credit cards

Which of the following could be a SECURED loan? (hint: choose 2 correct answers)

Mortgage & Auto loan

Which of the following is NOT a typical type of credit?

Pre-Paid Debit Card

How do federal student loans differ from private student loans?

Private loan repayment may start while you're in school

Why might someone have a thin file? (hint: choose 2 correct answers)

The credit bureaus mistakenly think you have passed away You are relatively new to establishing credit

How do banks make money off of the credit they issue?

They charge a high interest rate on the loan

T/F: A negative credit event (bankruptcy) can have a WORSE impact on a higher credit score.

True

Which of the following does NOT contribute to your credit score?

Which banks issued your credit cards

Why does the amount of INTEREST you owe on a loan decrease over time?

With each payment, principal decreases, so interest lowers

Which is TRUE when you make only the minimum payment each month?

You ar charged interest on the remaining balance

Which is TRUE about Payday loans?

You are charged a 1-time fee for the loan

Which is TRUE when you make only the minimum payment each month?

You are charged interest on the remaining balance

Which of the following is TRUE about a credit report?

You can get a copy of your credit report for free

All of the following are benefits of having a good credit score EXCEPT...(hint: choose 2 correct answers)

You can get a higher return on your Retirement fund Higher interest rate on credit cards and loans MORE

Which of the following is TRUE about an auto LOAN and a LEASE? (hint: choose 2 correct answers)

You make monthly payments on both & Monthly payments tend to be lower with a lease

Which of the following is TRUE about finding errors on your credit report?

You may have to file a dispute with each credit bureau

What may NOT impact the interest rate on your loans?

Your level of education

When repaying your Federal student loans...(hint: choose 2 correct answers)

a loan servicer will contact you before repayment begins & you can choose from different repayment plans

Inquiries you've made on new lines of credit

annualcreditreport.com

True or False: Landlords are required to submit your payment history, which can boost your credit score.

false

A shorter auto loan term means ____ monthly payments & ____ total interest you'll pay.

higher, less

The cost of borrowing money is referred to as

interest

Your net worth...(hint: choose 2 correct answers)

is your assets - your liabilities is what you own minus what you owe

Using the debt snowball method, you make...

minimum payments on large loans; pay extra on small loans

Using the High Rate Method, you...

put extra money towards loans with the highest interest rate

Benefits of credit cards include:

safe and convenient, bonuses are offered allows you to build a positive credit report needed for reservations and online shopping

True or False: A cosigner's credit history can be affected by the loan they are cosigned on.

true


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