SPRING'24 Credit Management Flashcardziz

Front

Felix opens a credit card with no annual fee, so he assumes that using the credit card regularly will be absolutely free for the next two years while he finishes grad school. Why is his assumption incorrect?

Back

Unless he pays the whole bill every month, he will pay interest according to his APR

Front

If you buy a $1000 bicycle, which credit card payoff strategy will result in your paying the LEAST total amount? Options: Pay the minimum monthly payment, Pay $100 per month for 10 months, Pay $250 per month until it’s paid off, Don’t make any payments until you have the full $1000 saved, regardless of how long that takes

Back

Pay $250 per month until it’s paid off

Front

If your credit card limit is $800 and your outstanding balance is $725, what is the largest amount you can charge on that card in the upcoming month?

Back

$75

Front

Why is it good advice for Shonda to spend a year building her credit history and boosting her credit score before applying for a loan to buy her dream car, which costs $54,000?

Back

A good credit score will reduce her interest rate.

Front

Paying more than the minimum payment (or paying your balance in full) is beneficial because…

Back

You pay less interest overall

Front

If a person with multiple sources of debt has a goal of eliminating one or more of them in as little time as possible, which debt repayment strategy would be best?

Back

Snowball method

Front

All of the following appear on your credit report EXCEPT…
Your checking account balance, Student loan payment history, Balance owed on a car loan, Number of active credit accounts

Back

Your checking account balance

Front

In general, why do so many different types of companies check your credit report?

Back

They want to make sure you’re likely to make consistent and timely payments

Front

What should you do if you find errors in your credit report?

Back

Contact the credit reporting agency or the company that provided the information

Front

Which of the following categories make up most of your credit score?
Number of recent hard inquiries,
Average length of your credit history,
Number of active credit accounts,
Payment history and credit utilization

Back

Payment history and credit utilization