Financing Large Expenditures

What are some examples of monthly expenses?

• Car insurance and tax bills

• College tuition and house payments

• Electricity bills and cable television

• Health club memberships and neighborhood pools

Which of the following is an example of a planned expenditure?

• Repairing a car after an accident

• Paying for dance lessons

• Losing a job unexpectedly

• Having a health care emergency

Why is it important to save money regularly?

• To avoid going into debt

• To buy expensive clothes

• To invest in a small business

• To pay off credit card bills

When is borrowing money considered a good idea?

• When buying a $200 pair of jeans

• When financing a college education

• When choosing a less expensive option

• When deciding not to make a purchase

What is the advantage of going into debt to improve one's education?

• It allows for buying a home

• It increases job opportunities

• It helps in paying off tax bills

• It leads to higher credit card bills

What is the potential cost of buying a $200 pair of jeans with debt?

• $200

• $300

• $400

• $500

How does a debit card work?

• The amount is deducted from the bank account right away

• The purchases go on a credit card bill

• The money remains in the checking account until the bill is due

• The individual receives a bill during the month and pays it at that time

What happens if a customer's debit card purchase exceeds the amount in their bank account?

• The bank charges an overdraft fee

• The bank denies the purchase

• The bank adds charges to the customer's account

• The bank pays the person to whom the check was written

What is an annual fee associated with credit cards?

• A fee charged for not having enough money in the account

• A fee charged for writing a check with insufficient funds

• A fee charged for using a credit card at an ATM

• A fee charged by the bank or credit card company every year

What is a characteristic of a no-annual-fee credit card?

• The consumer pays all charges on the bill every month

• The consumer pays a fee for not having enough money in the account

• The consumer pays a fee for writing a check with insufficient funds

• The consumer pays a fee for using a credit card at an ATM