NGPF - Credit

Which of the following will not help you build a credit history

• credit card

• auto loan

• debit card

• secured credit card

Which is true comparing debit cards and credit cards

• debit cards -- paying at the register while credit cards promise to pay back later

• credit companies give you a monthly statement but debit card companies do not.

• credit cards take money directly from your bank account, while debit cards get their money from VISA or Mastercard companies.

• Many more business accept credit cards than debit cards

When loans are amortized, monthly payments are _______ while the interest part of the monthly payment _________ and the principal portion of the monthly payment _______ over time.

• constant, increases, increases

• constant, decreases, increases

• variable, decreases, increases

• variable, decreases, decreases

The shorter your term length, the ________ your monthly payments, and the ________ the total interest you will pay.

• higher, lower

• higher, higher

• lower, lower

• lower, higher

When you read through the credit card disclosure (Schumer box) you see the APR for a specific card is set at 9.99% - 23.99%. Which statement is true?

• When given a range of APRs like this, you can assume most cardholders pay the lowest rate listed

• Your APR will be within that range, depending on the strength of your credit history

• With credit card APRs, cardholders like higher APRs because they earn more

• The APR on credit cards is usually fixed so it won't be adjusted as long as you are a cardholder

What is an advantage of using a credit card?

• It will not affect your credit score or credit history

• Since it is tied directly to your checking account, it prevents you from spending money you do not have

• If you need to carry a balance, the interest rates are generally quite low (less than 5%)

• If you pay off your balances every month in full it's like getting a short term interest free loan

Credit card disclosure: "your due date is at least 25 days after the end of the billing cycle. We will not charge you interest on new purchases provided that you have paid your previous balance in full by the due date each month. "Identify the true statement."

• If you make the minimum paymet on your card within the 25 day period, the credit card company will not charge you interest

• If you pay yur previous balance in full after the due date, the credit card company will not charge you interest

• If you make your credit card payment before the due date, you will be charged interest regardless of the amount of your payment

• The 25 days after the end of the billing cycle is referred to as the grace period.

You see on a commercial that Orange Co is offering a credit card with a 5% cashback program for all cardholders. What is ONE question you might ask to evaluate how good this offer is?

• Can I choose the picture that is on the front of my credit card?

• Can I get a debit card along with a new credit card?

• Who does OrangeCo use as their spokesperson in the commercial?

• Is there an annual fee on this credit card and how much is it?

Select the statement below that accurately describes a characteristic of a credit card.

• you owe the same payment every month

• you must have money deposited into a checking account to use the credit card for purchases

• Making full payments on time every month is the only way to avoid interest charges

• they do not charge interest

A loan backed by collateral

• Unsecured Loan

• Secured Loan