Types of Credit

Which of the following is usually a secured debt?

• Student Loan

• Auto Loan

• Credit Loan

• Personal Loan

Which description best fits what is meant when someone talks about their credit card APR?

• The total amount of purchases they charge on an annual basis

• The remaining balance left on a credit card once the minimum monthly payment is made

• The average credit score each person is assigned based on their payment history

• The percent the credit card company charges you for the benefit of receiving a temporary loan from them

Which of the following is NOT a typical type of credit?

• Mortgage

• Overdraft

• Credit Card

• Pre-Paid Debit Card

Which of the following could be a SECURED loan? (hint: choose 2 correct answers)

• Auto loan

• Student loan

• Mortgage

• Overdraft

If the collateral for your secured loan can be taken away, why get a secured loan at all?

• Because they usually have a higher interest rate

• Because they usually have a lower interest rate

• Banks give you an extra 90 days to make a missed payment

• Banks typically don't charge interest for the first 12 months

What may NOT impact the interest rate on your loans?

• Your relationship with the financial institution

• Your credit score

• The loan amount

• Your level of education

Tags

CCSS.7.RP.A.3

True or False: A cosigner's credit history can be affected by the loan they are cosigned on.

• True

• False

Why does the amount of INTEREST you owe on a loan decrease over time?

• The institution trusts you more, so they lower the interest

• With each payment, principal increases; so interest lowers

• Banks are legally required to lower interest rates over time

• With each payment, principal decreases, so interest lowers

What information on a Schumer Box should you focus on when choosing a credit card? (hint: choose 3 correct answers)

• The term of the credit card

• Annual Percentage Rate (APR)

• Grace Period

• Fees

How do you avoid paying interest on your credit card (or any other loan for that matter)?

• Always make the minimum payment over time

• Pay interest 1st, then pay what you can on leftover balance

• Always make the full payment on time

• Pay the principal 1st, then pay what you can on interest

Tags

CCSS.7.RP.A.3