Ramsey Classroom Chapter 4 Honors Test 1

Front

Which of the following works as a definition of debt? Money that is earned from another person or company, Money owed to another person or company, A financial strategy to increase wealth, A type of credit offered by banks

Back

Money owed to another person or company

Front

What does the credit industry allegedly use to convince people to use their services?

Back

Offering a service that allows you to have everything you want

Front

Why is all debt considered bad?

Back

It is a financial burden that hinders financial peace and security.

Front

What is the primary way credit card companies make their profits?

Back

By customers carrying a balance from month to month

Front

Which statement is true about credit? Credit is a helpful tool that improves your life, Credit is a big business targeting consumers for profit, Credit is mainly used for educational purposes, Credit is not used by banks or lenders

Back

Credit is a big business targeting consumers for profit

Front

What is a common marketing tactic used by credit card companies to attract new customers?

Back

Low- or zero-interest introductory rates

Front

What is the actual benefit of a credit card offering 1.5% cash back?

Back

$1.50 for every $100 spent

Front

What is Revolving Credit?

Back

Credit that automatically renews whenever a payment is made to reduce the debt

Front

What is a Lien?

Back

A legal claim against (or right to own) an asset until the debt is repaid.

Front

What does Equity refer to in financial terms?

Back

The increase in value of a home over time and the difference between the amount owed and what the home could be sold for.