Virtual Business: Personal Finance Lesson 8 Review

A business that gives you a loan is:

• A credit bureau

• A debt collection agency

• A credit counseling agency

• A creditor

You ran short of cash and borrowed $50 from your rich cousin. When you paid her back, insisted that you owed $60. What is the extra $10 called?

• Bribery

• Interest

• Principal

• Credit

When you borrowed $50 from your rich cousin, and then had to pay her back $60, what is the original $50 called?

• Bribery

• Interest

• Principal

• Credit

Matt has $471.60 in his checking account and feels he's doing pretty well financially. Then his car stops running. His mechanic is able to fix it in a day, but with the towing charges, parts, and mechanic's labor, he now needs to pay the service center $624.11 so he can drive his car to work. Of the following choices, which is the best course of action for Matt?

• Pay the service center with his Visa credit card

• Pay the service center with his MasterCard debit card

• Write a check for $624.11 and hope the service center doesn't take it to the bank before next payday

• Call his employer to say he won't be able to come to work

Chandra likes her new credit card. She uses it whenever she can, but she's careful to stay below her credit limit. After two months she notices her credit card bill includes huge finance charges. She chose her card because it featured 0% APR, so she doesn't think she should have any finance charges at all. What is the most likely explanation for the finance charges on Chandra's bill?

• The credit card company made a billing error

• This a case of credit card fraud

• The introductory rate on the card is no longer in effect

• The APR does not apply because she is under the credit limit

Which of the following is the best definition of a minimum payment on a credit card?

• A fee that must be paid whether the card is used or not

• The smallest payment that will keep a credit card holder in good standing with the lender

• The interest on the purchases that were made on the credit card

• A low introductory payment offered by the lender for a few months until the card holder has established good credit

You forgot to pay last month's credit card bill. Your creditor will probably:

• Cancel you account

• Send you a reminder to pay the bill

• Add finance charges and late fees to your bill

• Reduce your minimum payment

You can best compare credit card offers by looking at these two features

• APR and fees

• Minimum payment and payment date

• Principal and interest

• Introductory rate and credit limit

Oh no! Someone stole your credit card and charged $2,500 worth of purchases before you even knew the card was missing. How much of the unauthorized charges can you be required to pay?

• 0

• $50

• $250

• $2,500

If you get your first credit card while you're a full-time student, what can you expect about the card's APR on outstanding balances?

• It will probably be about the same as the APR on your parent's card

• It will probably be low

• It will probably be high

• It will probably be about the same as your friend's credit card from a different company