Types of Credit

Front

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

Back

They charge a high interest rate on the loan.

Front

Which of the following is NOT a typical type of credit? Mortgage, Auto or Personal Loan, Credit Card, Pre-Paid Debit Card

Back

Pre-Paid Debit Card

Front

Which of the following is typically a SECURED loan? Auto Loan, Student loan, Credit Card Balance, Overdraft

Back

Auto 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?

Back

Always make the full payment on time

Front

Which is TRUE when you make only the minimum payment each month? Options: You are charged interest on the remaining balance, Your credit line is restored to its maximum amount, Credit card companies have permission to sell your information, It is the fastest way to pay off your debt

Back

You are charged interest on the remaining balance

Front

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

Back

higher, less

Front

All of the following can happen when you fail to make one mortgage payment EXCEPT:
- 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 of the following is most likely a fixed-rate unsecured debt? Student loan, Credit card, Mortgage, Auto loan

Back

Student loan