Econ. Ch. 4 review

Credit card commercials show people making payments for months/years to pay off the credit cards to entice you to get their card.

• True

• False

Home equity loans (HELOC) can only be used for home repairs and renovations.

• True

• False

What do banks and lenders use credit scores to determine?

• how likely you are to repay debt

• how much collateral you have to put up for a loan

• your financial responsibility

• how successful you are

Making purchases with a credit card means that you are borrowing money with interest. Who pays higher interest rates?

• young people

• old people

• rich people

• college graduates

If you finance a car, you will end up paying more than the sticker price.

• True

• False

The majority of American live paycheck to paycheck.

• True

• False

What is your greatest tool for building wealth?

• tax cuts

• single stocks

• your income

• your credit score

Which of these requires the borrower to put up collateral for the loan?

• unsecured loans

• secured loans

• revolving credit

• interest rates

Which of these is involved in determining your FICO score?

• income level for one year

• percent of income you invest

• amount in your savings acct.

• history of payment to lenders

You MUST have a credit card to which of the following?

• rent a car

• book a hotel room

• buy airline tickets

• none of the above