Chapter 4 Test on "Debt"

Teens are a huge target of credit card companies today

• True

• False

You need to have a credit card to rent a car or check in to a hotel.

• True

• False

When a person owes more on an item (like a car or house) than it is worth, the person is said to be _________ on the loan

• Indebted

• Upside Down

• Secured

Individual account information is removed from your credit report 7 years after the last activity, except for Chapter 7 bankruptcy, which stays on your credit report for

• 5 years

• 10 years

• as long as you have a low credit score

• until you get out of debt

A detailed report of an individual's credit history

• Credit Report

• Cash Flow Statement

A long-term Rental agreement on a car; a form of secured Long-term Debt. It's the Most Expensive way to drive.

• Loan

• Lease

• Cash to Own

Which statement best summarizes how using a Credit Card (vs. a Debit Card) changes your behavior?

• People like to get rewards, so using a Credit card to get a discount is worth it

• People tend to spend more money when using a Credit Card over a Debit Card or Cash

• People only buy what they need, so there is no change in using a Debit of a Credit card.

Which of the following are recommended steps in the Drive Free method of purchasing a Car?

• Plan your purchase in advance using the sinking fund method of saving.

  .

• Place your savings in a mutual fund so that your money can make more money.

• Start with an inexpensive car and gradually move up in car value as your savings increases.

• All of the above are good options

A yearly fee that’s charged by the credit card company for the convenience of the credit card

• Interest Rate

• Annual Fee

• Rewards

Which of the following is a sign that your identity may have been stolen?

• Bank and billing statements don’t arrive on time

• Your credit report shows accounts you didn’t open

• A call from a collection agency about a debt you didn’t incur

• All of the Above