lesson 5 credit and debt

What could be a good option available to you if you are behind on loan payments? a) A financial institution may offer for you to pay a little now and pay the rest after your next pay day. b) You can ignore your payments until the financial institution asks about them. c) You can take out a payday loan. d) Ask your financial institution to get out of the loan contract.

a) A financial institution may offer for you to pay a little now and pay the rest after your next pay day.

To maintain a good credit score you must ______. a) manage your debt wisely. b) check your credit score every week. c) have credit monitoring. d) have many open credit cards.

a) manage your debt wisely.

What should you NOT use a loan to purchase? a) A house b) Tuition for higher education c) Airline tickets to your dream vacation d) A car

c) Airline tickets to your dream vacation

Paying only the minimum balance on your credit card can lead to... a) an increase in your credit score b) paying more interest. c) late fees d) All of the above

b) paying more interest.

What is NOT a benefit of having a good credit score? a) When you need a loan, you'll have more loan offers to pick from. b) You'll get better interest rates on your loans. c) It will be easier to get an apartment. d) You'll get accepted to better education institutions.

d) You'll get accepted to better education institutions.

Which item is important to consider when selecting a credit card? a) Annual Percentage Rate (APR) b) Fees c) The look of the credit card d) Both APR and fees

d) Both APR and fees

Which of the following is NOT a feature that makes a secured loan less costly than an unsecured loan? a) A high interest rate b) Collateral c) Less risk for the financial institution d) All of these are correct

a) A high interest rate

Not managing your debt wisely can result in ________. a) An increase in your credit score b) A decrease in your credit score c) Inaccessible credit score d) No change in your credit score

b) A decrease in your credit score

using a loan could help with the purchase of which of the following? a) a new telivision b) a dream wedding c) a house d) airline tickets to your dream vacation

c) a house

Which of the following is NOT a recommended method to protect you from identity theft? a) Expensive specialty locking or monitoring service. b) Place a credit freeze with the credit bureaus. c) Regularly monitoring your credit report. d) Contacting lenders and credit bureaus to report inaccurate information.

a) Expensive specialty locking or monitoring service.

Recommended methods to protect yourself from identity theft and fraud include_______. a) Placing a credit freeze with the credit bureaus. b) Monitoring your credit report every 2-3 years. c) Allowing inaccurate information to be removed from your report after 7 years. d) Utilizing a specialty locking or monitoring service.

a) Placing a credit freeze with the credit bureaus

All of the following are benefits to paying the full balance on your credit card each month EXCEPT: a) Your credit score can decrease. b) You won't have to pay interest. c) You won't have to pay any late fees. d) Your credit score can increase.

a) Your credit score can decrease.

Credit cards can help _____________ when paid off on time regularly. a) build credit history b) act as a form of identification c) lower your debt d) balance your checking account

a) build credit history

When looking for pre-approval on a car loan you should NOT... a) get a loan from the car dealer directly to keep things simple. b) look for the lowest interest rates you can find. c) select the loan that has right repayment period for you. d) compare pre-approval offers and select the one that is best for you.

a) get a loan from the car dealer directly to keep things simple.

The cost of a secured loan is typically lower than the cost of an unsecured loan because _______. a) it requires collateral. b) the loan takes longer to get. c) it has high interest rates. d) your parents will make sure you pay it back.

a) it requires collateral.

Annual Percentage Rate (APR), credit limit, and penalties and fees are important to consider when _____. a) Choosing a financial advisor b) Choosing a credit card c) Looking at your credit score d) Selecting a financial institution

b) Choosing a credit card

Having a great credit score will make it easier for you to get into a better educational institution. a) TRUE b) FALSE

b) FALSE

Which is a positive reason for using a credit card to finance purchases? a) You will get charged high interest. b) Paying it off on time can help build your credit history c) You won't have to budget for your credit card expenses. d) You'll be able to spend a lot of money without paying it back

b) Paying it off on time can help build your credit history

Which of these items is NOT important to consider when selecting a credit card? a) Annual Percentage Rate (APR) b) The look of the credit card c) Credit limit d) Penalties and Fees

b) The look of the credit card

When are loans a good option to use? a) To pay for airline tickets to your dream vacation b) When paying for higher education c) To buy that new television d) For a dream wedding

b) When paying for higher education

Going directly to a car dealer for a loan to keep things simple is a... a) great idea because they want you to get the car so it'll be the best offer. b) not great because they typically offer higher interest rates. c) great idea because you don't have to deal with another lender. d) not great because car dealers don't offer loans.

b) not great because they typically offer higher interest rates.

Benefits to paying the full balance of your credit card each month include: a) Paying more in interest b) Decreasing your credit score c) Not having late fees d) Increasing your credit score

c) Not having late fees

What option will NOT be available if you are behind on loan payments? a) A financial institution may offer for you to pay a little now and pay the rest after your next pay day. b) You can borrow money from friends and family. c) You can ask to get out of your loan. d) Your financial institution might allow you to defer the loan but you'll have to pay the interest.

c) You can ask to get out of your loan.

What will happen to your credit score if you do not manage your debt wisely? a) You won't be able to track your credit score b) Your credit score will go up c) Your credit score will go down d) It will not affect your credit score

c) Your credit score will go down

Which of the following will help you protect yourself from identity theft and fraud? a) Regularly monitor your credit report. b) Contact lenders and credit bureaus to address incorrect information. c) Freeze your credit. d) All of the above.

d) All of the above.

Secured loans are less costly than unsecured loans because _________. a) They usually have a lower interest rate. b) They require collateral. c) They are less risky for the financial institution. d) All of these are true.

d) All of these are true.

What is a benefit of having a good credit score? a) Loan sharks will be less likely to bother you. b) You'll get accepted to better education institutions. c) You'll get more job offers. d) When you need a loan, you'll have more loan offers to pick from.

d) When you need a loan, you'll have more loan offers to pick from.

Which is NOT a positive reason for using a credit card to finance purchases? a) Paying it off on time can help build your credit history b) You can get rewards and discounts. c) You can buy something you need now and pay for it after pay day. d) You will get charged high interest.

d) You will get charged high interest.

When looking for pre-approval on a car loan you should... a) get a loan from the car dealer directly to keep things simple. b) get a loan from the car dealer directly to keep things simple. c) select the loan that has the longest repayment period. d) compare pre-approval offers and select the one that is best for you.

d) compare pre-approval offers and select the one that is best for you.