Types of Credit

Front

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

Back

Auto Loan

Front

If the collateral for your secured loan can be taken away, why get a secured loan at all?

Back

Because they usually have a lower interest rate

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

Why does the amount of INTEREST you owe on a loan decrease over time?

Back

With each payment, principal decreases, so interest lowers.

Front

What is the purpose of a Schumer box when applying for a credit card?

Back

It summarizes information like interest rates, fees, and grace periods

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

Which is TRUE when you make only the minimum payment each month?

Back

You are charged interest on the remaining balance.

Front

When can personal loans be a better option than credit cards? (hint: choose 2 correct answers) Options: If you want to earn rewards and enjoy travel benefits, If you want a lower interest rate, If you want purchase protection & warranties, If you increase your credit score

Back

If you want a lower interest rate

Front

Which is TRUE about Payday loans? Options: You can pay them back in installments, You are charged a 1-time fee for the loan, Most people successfully pay these loans back, You need a credit card account to get one

Back

You are charged a 1-time fee for the loan