Payment Methods & Financial Responsibility Practice

Which of the following represents financially responsible actions?

I. Spending within your means

II. Paying minimum credit card payments each month

III. Putting money into a savings account each month

IV. Spending money according to your budget

• I and IV only

• I, III and IV only

• II and III only

• IV only

Dakota asks Taylor to go to a professional tennis match. The trip costs approximately $2,000. Taylor has $1,500 in the bank, but Dakota wants him to use a credit card for the remaining $500. Taylor agrees to use a credit card to pay. Which is a possible cost for his financial irresponsibility?

• Taylor depletes his emergency fund for unexpected expenses.

• Taylor pays finance charges each month the credit card balance is not paid in full.

• Taylor is unable to pay one of his bills after the trip.

• All of the above.

Lindsey is denied a home loan to buy her first house. The mortgage company says that her credit score is too low. Which decision is financially responsible and will increase her credit score over time?

• Apply for another credit card to consolidate all of her debt onto one credit card.

• Make a budget to reduce spending and apply savings to payments on debt each month.

• Find a new mortgage company and reapply for the home loan.

• Take out another loan to reduce payments on current debt.

Is Cecilia's behavior financially responsible or financially irresponsible?

• Financially responsible

• Financially irresponsible

Is Rebekah's behavior financially responsible or financially irresponsible?

• Financially responsible

• Financially irresponsible

Is the Dyson family's choice financially responsible or financially irresponsible?

• Financially responsible

• Financially irresponsible

Is Andrew's behavior financially responsible or financially irresponsible?

• Financially responsible

• Financially irresponsible

A stored value card is...

• A credit card for a store (like a Macy's credit card)

• A gift card for a store (like a gift card to Kohl's)

• A debit card for a store (like a debit card for Target)

True or False: When you use a credit card, the amount you spend is immediately deducted from your bank account.

• True

• False

True or false: When you have a debit card, you use a personal identification number (PIN) when you make purchases for security purposes.

• True

• False