Types of Credit

Front

Where do banks get the money to lend out to consumers? Options: From their clients' credit card accounts, From their clients' savings accounts, From the Federal government, From their own money vaults

Back

From their clients' savings accounts

Front

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

Back

They charge a high interest rate on the loan.

Front

What may NOT impact the interest rate on your loans? Your relationship with the financial institution, Your credit score, The loan amount, Your level of education

Back

Your level of education

Front

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

Back

True

Front

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

Back

Always make the full payment on time.

Front

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

Back

higher, less

Front

Which of the following is TRUE about an auto LOAN and a LEASE? You must give the car back when a lease has expired, Only a loan requires some kind of upfront payment, You make monthly payments on both, Monthly payments tend to be lower with a lease

Back

You make monthly payments on both

Front

All of the following can happen when you fail to make a mortgage payment EXCEPT:
- After one missed payment, you can lose your home
- You will be charged fees
- Your credit score can take a hit
- Foreclosure process starts after 30 days of missed payment

Back

After one missed payment, you can lose your home

Front

Which statement is true about debit and credit cards? More businesses accept credit cards than debit cards, You get a monthly statement for a credit card, but not for a debit card, Credit cards withdraw money directly from a bank account; debit cards don't, Debit cards withdraw money directly from a bank account; credit cards don't

Back

Debit cards withdraw money directly from a bank account; credit cards don't

Front

Which of the following factors will most likely INCREASE the overall cost of your loan? A lower interest rate, A longer loan term, Offering collateral to secure the loan, Paying a higher down payment

Back

A longer loan term