personal finance 4

Megan is trying to decide between getting a debit card, a prepared debit card, and a credit card, which statement is true

• All 3 cards are completely different

• Debit cards and prepaid debit cards are the same

• All 3 cards are completely the same

• Debit cards and credit cards are the same

The average APR for a payment loan is closest to...

• 40%

• 400%

• 4%

• 14%

Which of the following statement comparing credit and debit cards is TRUE

• prepaid cards are the best card to use in daily life

• credit card companies provide you with a monthly statement, while debit cards do not

• With debit cards, you're spending your own money at point of sale, but with credit cards, you're getting a loan that you need to pay back later

• Credit cards pull money directly from your bank account, while debit cards get their money from visa or MasterCard

Which of the following is most likely to represent a fixed rate, secured debt

• a prepaid debit card

• a student loan

• a credit card

• an auto loan

Which of these statements best explains why its often a good idea to pay more than the monthly amount due on an amortized loan

• the extra payment will be applied to the principal amount you owe, which will pay down you debt more quickly

• Amortized loans typically have much higher interest rates than credit cards, so they're the best place to put your extra cash

• every time you pay extra, the lender will reduce the interest rate they're charging by a small amount

• The extra payment will be applied to the interest you owe, which will reduce the overall cost of your loan

Taylor is about to go car shopping, and she has $5000 saved that she can use for down payment while still having extra cash in her emergency fund. She expects the exact model car she's looking for to cost $35,000. If her top priority is having the lowest monthly payments possible, which advice should she follow

• Put in $3500 for your down payment, and choose a loan with long term length

• put in $2500 for your down payment, and choose a loan with a short term length

• put in $0 for your down payment, and choose a loan with a short term length

• put in $5000 for your down payment, and choose a loan with a long term length

Reading through a credit card's Schumer Box, you see the APR for a specific card is set at 9.99% - 23.99%. Which statement is true

• when giving a range of APR's like this, you can assume most cardholders pay the lowest rate listed

• Your APR will be within that range, depending on the strength of your credit history

• The APR on credit is usually fixed, so it wont be adjusted as long as you are a cardholder

• In this case, you want the highest APR in the range because you'll earn more

Credit card disclosure: "your due date is at least 25 days after the end of the billing cycle. We will not charge you interest on new purchases provided that you have paid your previous because in full by the due date each month." identify the true statement.

• the 25 days after the end of the billing cycle referred to as the grace period

• 25 days is an exceptionally long period without paying a credit card bill

• if you pay previous balance in full after the due date, the credit card company will not charge your interest

• if you make the minimum payment on your card within the 25 day period, the credit card company will not charge you interest

A loan with a shorter term length will have ______ monthly payments, and you will pay _____ in total interest

• Higher, more

• Higher, less

• Lower,more

• Lower, less

Select the statement below that accurately describes a characteristic of a credit card.

• Making full payments on-time every month is the only way to avoid interest charges

• You might have money deposited into a checking account to use the credit card for purchases

• you owe the same payment every month

• they do not charge interest