Personal Finance Ch. 2

A fee that a bank, credit card, or other lender charges for the opportunity to purchase something and pay for it over time.

• Interest

• Dividend

• Credit

• Finance rate

Car loans are just a way of life. You will always have a car payment.

• True

• False

Staying away from car payments by driving reliable used cars is what the typical millionaire does.

• True

• False

When you buy things with cash, you will always pay more for the things you buy.

• True

• False

Which of the following is not one of the ways that the federal Fair Credit Reporting Act of 1970 protects consumers?

• The accuracy of the credit report

• The privacy of the consumer

• The financial goals of the consumer

• The fairness of the credit reporting

The FICO score does NOT measure which of the following.

• Debt history

• Savings account balance

• Types of debt

• New debt

Which of the following describes the best way to buy a car?

• Ask your parents to borrow money for the purchase

• Save up and pay cash for a used car in your price range

• Save up a nice down payment and finance the remaining cost of the car

• Allow your grandparents to cosign your loan for a new car

On average, over 70% of college students graduate with student loan debt.

• True

• False

The federal Fair Debt Collection Practices Act of 1977 dictates which of the following.

• How much debt a person is allowed to carry

• How much interest a lender can charge

• How debt collectors can interact with individuals

• How much of a debt a person must repay

On average, how much of a person's take-home pay is sent back out for debt payments?

• 8%

• 12%

• 25%

• 40%