Understanding Payment Methods and Borrowing

Front

_____________ cards are linked to your checking account. _________ cards are paid later.

Back

Debit cards are linked to your checking account. Credit cards are paid later.

Front

Which of the following is NOT a payment that is made directly from your checking account? Credit cards, Automatic bank payments, Online payments, Checks

Back

Credit cards

Front

What is the main difference between an online payment and an automatic bank deduction?

Back

An online payment is one you authorize through your bank to pay a creditor; an automatic deduction is authorization you grant your creditor to draft the bill automatically from your bank.

Front

_____________ allow customers to pay a deposit on an item, and then later pay the balance. Under these plans, the customer does not receive the item until the balance is paid in full.

Back

Layaway plans

Front

What is a down payment?

Back

An initial payment that lowers your loan amount

Front

In the last few years, the time period for an auto loan has gone from 5 years (60 Months) to 6 years (72 months). What impact does that have on your finances?

Back

You have lower payments but end up paying more interest.

Front

Which of these is NOT an installment loan? Credit card, Mortgage, Car loan, Student loan

Back

Credit card

Front

Which of the following is NOT an advantage of using credit cards responsibly? Building good credit history. Earning rewards points or cashback. Fraud protection.

Back

Easily overspending and accumulating debt.

Front

What is the primary disadvantage of not paying your credit card balance in full each month?

Back

Having to pay interest on the unpaid balance.

Front

Which of the following is a potential consequence of excessive credit card use? Improved credit score. Financial stability. Increased debt. Reduced risk of identity theft.

Back

Increased debt.