Credit and Debt Unit Assessment

Making purchases with a credit card means that you're borrowing money with interest, and ______ pay much higher interest rates.

• Young people

• Old people

• Rich people

There are certain things, like renting a car or booking a hotel room, that you cannot do without having a credit card.

• true

• false

Making purchases with a credit card means that you're borrowing money with interest, and ______ pay much higher interest rates.

• Young people

• Old people

• Rich people

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

• True

• False

Credit card companies make the most profit from _______________.

• Incentive programs with banks

• Government tax breaks

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

Credit cards that offer flashy rewards like airline miles often . . .

• Charge a high annual fee

• Don't include protection against fraud

• Can't be used for personal expenses

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

• True

• False

Credit card companies charge stores a 2–3% fee for every purchase made with credit cards. This is called a(n) . . .

• Merchant fee

• Cash advance fee

• Annual fee

Leasing a car is a method of financing where someone ____________.

• Never pays any interest or fees

• Is paying off two or more vehicles at one time

• Makes monthly payments on but does not own the vehicle.

Predatory lenders get their negative reputation from...

• Discreetly selling personal bank information

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

• Charging high fees for loans and targeting desperate people