Financial Literacy 2 Credit and Debt

Using a loan could help with the purchase of which of the following?

• A house

• A new television

• A dream wedding

• Airline tickets to your dream vacation

Which item is important to consider when selecting a credit card?

• Annual Percentage Rate (APR)

• Fees

• The look of the credit card

• Both APR and fees

The cost of a secured loan is typically lower than the cost of an unsecured loan because _____.

• it requires collateral

• the loan takes longer to get.

• it has high interest rate.

• your parents will make sure you pay it back.

To maintain a good credit score you must ______.

• manage your debt wisely

• check your credit score every week.

• have credit monitoring.

• have many open credit cards.

What will happen to your credit score if you do not manage your debt wisely?

• Your credit score will go down

• You won't be able to track your credit score

• Your credit score will go up

• It will not affect your credit score

Recommended methods to protect yourself from identity theft and fraud include _______.

• Monitoring your credit report every 2-3 years

• Placing a credit freeze with the credit bureaus.

• Allowing inaccurate information to be removed from your report after 7 years.

• Utilizing a specialty locking or monitoring service.

Paying only the minimum balance on your credit card can lead to ...

• an increase in credit score

• paying more interest

• late fees

• all answers are correct

When looking for pre-approval on a car loan you should.....

• get a loan from the car dealer directly to keep things simple

• select the loan that has the longest repayment period

• compare pre-approval offers and select the one that is best for you

What could be a good option available to you if you are behind on loan payments?

• A financial institution may offer for you to pay a litlte now and pay the rest after your next pay day

• You can ignore your payments until the financial institution ask about them.

• You can take out a payday loan

• Ask your financial institution to get out of the loan contract

Credit cards can help _______ when paid off on time regularly.

• build credit history

• act as a form of identification

• lower your debt

• balance your checking account