RAMSEY CH 4 L1-L4

What is the definition of debt as mentioned in the learning material?

• Money that is earned from another person or company

• Money owed to another person or company

• A financial strategy to increase wealth

• A type of credit offered by banks

According to the text, what is often not shown in credit card commercials?

• The benefits of using credit cards

• People making payments for months or years

• The ease of getting a credit card

• The variety of uses for credit cards

What does the credit industry allegedly use to convince people to use their services?

• Promises of financial freedom

• Claims of no interest rates

• Offering a service that allows you to have everything you want

• Providing educational resources about finance

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

• To invest wisely

• To stay out of debt

• To use credit cards frequently

• To borrow as much as possible

According to the text, why is all debt considered bad?

• It helps you manage your finances better.

• It is a strong argument for a good-paying career.

• It is a financial burden that hinders financial peace and security.

• It increases your credit score.

What does the author imply about student loans?

• They are the only way to pay for college.

• They are considered "good debt" by many.

• They should be avoided as they are a form of bad debt.

• They guarantee a good-paying career.

What is the primary reason given for avoiding debt, according to the text?

• It allows for better budgeting of money.

• It is considered smart financial planning.

• It limits the amount you can save, give, or spend on other things.

• It enhances your reputation.

What is the primary way credit card companies make their profits according to the text?

• By charging annual fees to all cardholders

• By customers carrying a balance from month to month

• By offering free credit to everyone

• By providing low interest rates

According to the text, what happens when you accept a credit offer?

• You immediately receive a cash bonus

• You get a discount on your first purchase

• You go into debt and start making money for the lender

• Your credit score automatically improves

Which statement best reflects the text's view on credit?

• Credit is a helpful tool that improves your life

• Credit is a big business targeting consumers for profit

• Credit is mainly used for educational purposes

• Credit is not used by banks or lenders