PF: Chapter 4 Lesson 1 Beware of Credit and Debt

What do credit card commercials often fail to show?

• The process of making payments for purchases

• The benefits of using credit cards

• The ease of swiping a credit card

• The happiness that comes from using credit cards

According to the text, why does the credit industry promote the use of credit cards?

• To provide a service to customers

• To help people afford the things they want

• To create financial insecurity and stress

• To make money for themselves

What is one of the money principles mentioned in the text?

• To use credit cards responsibly

• To stay out of debt

• To take advantage of easy financing

• To sign up for student loans

According to the text, what is the problem with student loans?

• They are a necessary part of paying for college

• They are considered good debt

• They can lead to financial insecurity

• They help students get good-paying careers

What does it mean to be in debt?

• To owe money to someone

• To have financial peace and security

• To have a good-paying career

• To be financially responsible

According to the text, how do credit card companies make their biggest profits?

• By offering low interest rates

• By encouraging customers to pay off their debt

• By imposing hidden fees and high interest rates

• By providing cash back and other rewards

What is one marketing tactic used by credit card companies?

• Offering a low- or zero-interest introductory rate

• Requiring only the minimum monthly payment

• Giving cash back and other rewards

• Providing free credit cards to teenagers

What is the problem with minimum monthly payments?

• They cover interest charges but don't reduce the debt significantly

• They help customers pay off their debt quickly

• They are a good strategy for managing debt

• They are required by law

What does the text suggest as a solution to the debt crisis?

• Using credit cards responsibly

• Becoming financially independent

• Avoiding the use of credit cards

• Paying off debt gradually

What is the main goal of credit card companies?

• To provide a useful financial tool

• To help people reach their financial goals

• To make money for themselves

• To promote financial peace and security