Personal Finance Ch 4

Credit card companies make the most profit from _____________.

• Government tax breaks

• Incentive programs with banks

• Partnering with companies to offer rewards to customers

• Charging interest to customers who only pay part of their monthly debt

Something that credit card commercials don't show you is . . .

• How happy your parents will be that they don't have to lend you cash anymore

• How much your credit score will grow right away

• How great your life will be with payments

• People making payments for months or years on those credit card purchases

What is the best way to avoid falling into debt?

• Take out a small loan for any purchases over $1,000.

• Only buy things that you can purchase with cash

• Use airline miles earned through a credit card to help pay for a vacation.

• Use credit to pay for large expenses now so that you have plenty of time to pay it off.

Predatory lenders get their negative reputation from . . .

• Charging high fees for loans and targeting desperate people

• Limiting the amount of time a borrower has to use a loan

• Taking advantage of people during the Great Depression

• Discreetly selling personal bank information

How you spend and give your money . . .

• Doesn't matter until you're in your 40s

• Can't be changed, even if you try

• Is a reflection of your personal values

• Is the most important thing in life

When you buy with credit, you typically spend more than you would with cash or a debit card.

• True

• False

Banks and lenders use credit scores to determine . . .

• How successful someone is

• How much collateral someone has available to put up for a loan

• A person's financial responsibility

• The likelihood that someone is able to repay debt

Your greatest tool to building wealth is ____________.

• Your income

• Your credit score

• Single stocks

• Tax cuts

A credit score is an indicator of how well someone pays off their debt, not how well they handle money.

• True

• False

________________require the borrower to put up collateral for the loan.

• Unsecured loans

• Revolving credit

• Secured loans

• Interest rates