Credit, Debt, and Identity Theft Review

Credit is the ability to _________ and ____________ later. 

• Buy now; pay
• Save now; spend
• defer later; pay now
• see; smell

Which of the following is not a typical type of credit

• Credit Card
• Mortgage
• Credit Default Swap
• Student Loan

People use credit cards because it is easier than___________________.

• bartering
• carrying cash
• trading
• Coins

Having a credit card is good for building and establishing your ____________.

• Debt
• Personal Savings
• Student Debt
• Credit History

Payday lenders allow you to borrow money against your next pay check. This is a bad idea because_____________

• Its a good idea, give me the $$$
• you will quickly spiral into debt
• You can get a higher interest rate from a loan shark
• Banks suggest using different pay day lenders.

To ________ on a loan is to fail to repay the loan.

• default
• bounce
• defer
• exchange

____________ is when a bank or mortgage lender seizes a house and sells it because the homeowner cannot pay the mortgage loan.

• Repossession
• Foreclosure
• Default
• Bankruptcy

_____________ is when a bank or other lender takes property purchased by a borrower who cannot repay his or her loan for that property.

• Repossession
• Foreclosure
• Default
• Bankruptcy

___________ is a legal proceeding involving a person or business that is unable to repay outstanding debts.

• Repossession
• Foreclosure
• Default
• Bankruptcy

How do banks make money off of the credit they issue?

• They charge a large, one-time fee at the start of the loan

• They take out a small fee each month from your checking account

• They charge a high interest rate on the loan

• This is a trick question - they DON'T make money!