Credit Cards

What makes a loan be categorized as secure?

• It is secured after all payments are made.

• It is secured because it is backed up with some form of collateral.

• It is secured when the borrower receives the loan amount from the bank.

• It is secured when someone co-signs on the loan.

Which of the following is usually a secured debt?

• Student loan

• Auto loan

• Credit card

• Personal loan

Which of the following is a TRUE statement describing the benefits of an installment loan?

• An installment loan allows you to make one large purchase, even if you don't have all the money for it up front.

• An installment loan does not require a credit check, so they are easy to obtain.

• An installment loan allows you to make many small purchases as you need them, as long as you're under your credit limit.

• An installment loan does not require monthly payments, so they can be paid back when the borrower is ready.

The definition of credit card APR is...

• The total amount of purchases they charge on an annual basis

• The total interest paid for a purchase

• The average credit score each person is assigned based on their payment history

• The percent the credit card company charges you for the benefit of receiving a temporary loan from them

2. Which statement includes one real benefit from shopping with a credit card?

• 1. You may earn cash back, travel rewards, or other perks for each dollar you spend

• 1. Most stores will give you a discount if you pay with credit instead of cash or debit

• 1. It pulls money directly from your bank account, preventing you from overspending

• 1. If you do not have the money to pay your monthly bill, you can just wait a few months and pay the same amount then

3. Which of the following is NOT included in a Schumer Box?

• 1. APR

• 1. Minimum Interest charge

• Fees

• Credit Score

1. Kelsey wants to open a credit card and has narrowed her choice down to three possible options. Which factor is MOST important in determining which card she should get?

• 1. Which card her best friend has

• 1. The annual fee for each card

• 1. Whether each card FDIC insured

• 1. The most recognizable brand

2. Joyce sees a credit card offer, advertising 0% APR. Which of the following is least likely true?

• 
  0% offer is introductory and lasts only 6 months

• 1. 0% offer is only available to those with high credit scores

• 1. 0% offer is good on new purchases only, not cash advances

• 1. 0% offer lasts indefinitely, as long as you always make at least your minimum monthly payment

  
  

3. Mia doesn't have any credit history, so she's going to open a secured credit card to begin building her credit. She puts down an $800 security deposit. What feature of an unsecured credit card is Mia's security deposit most like?

• 1. the APR

• 1. the term

• 1. the credit limit

• 1. the annual fee

1. Ramon and Stephen are each considering taking out a $1200 loan so they can buy dirt bikes to enjoy on the weekend. Ramon's bank is offering him a 4.3% interest rate, while Stephen's is offering him a 2.4% interest rate.  Which of the following statements is TRUE?

• 1. If each loan has a term of 3 years, Ramon's monthly payments will be higher

• 1. If they both make $300 payments a month, Ramon will pay off his loan faster

• 1. Both men would likely get a better interest rate if they used a credit card, rather than a personal loan, to make their purchases

• 1. If Ramon applies to Stephen's bank, instead, for his loan, he's guaranteed to get the same 2.4% interest rate that Stephen's been offered