Dave Ramsey Chapter 3 Debt

Which of the following is true about using credit?

• It's the same as using cash

• when using credit people tend to spend less

• when using credit people tend to spend more

• using credit neurologically registers as pain

Payday lending and cash advance companies are aggressively targeting which group of people? (in the video dave said congress even had to put in a low specific to this group of people)

• teens

• elderly

• college graduates

• military

If 80% of millionaires are first generation rich, when one can conclude:

• they started with nothing, did smart stuff, and became millionaires

• they fell for the debt myths that are common in society

• they inherited money from their family

• they are rich so they can do whatever they want with their money

On average payday lending, cash advance, and title pawn loans cost the consumer:

• 400% or more annually

• Nothing but the fee if you pay back the loan within 30 days

• 3 times the APR of an average credit card

• 100-250% annually

What statement is NOT true about debt consolidation?

• you end up with only one payment to manage

• you end up saving money because you get a lower interest rate

• smaller payments mean more time in debt

• your lower interest loans also get rolled into the deal, so you end up with minimal savings

Which is true about the practice of marketing credit cards to young adults?

• young adults are the number one target of credit card companies in America today

• brand loyalty to your first card is incredible, so credit card companies work hard to win you over first

• colleges are losing more students to credit card debt problems than to academic failure

• all of the above

Which is NOT true about making purchases with credit cards?

• You spend 12-18% less using a credit card

• You spend 12-18% more when using a credit card

• you are less likely to experience neurological pain when purchasing with a credit card

• none of the above

Why do people think that the home equity loan is a good idea?

• there is a tax refund

• it serves a substitute for an emergency fund

• its a way to consolidate debt

• all of the above

Kevin has the following debts: Home equity loan, $24,000; Visa, $1,200; Student loan, $5,000; car, $12,000. How should he prioritize his debt snowball?

• home equity, visa, student loan, car

• visa, car, student loan, home equity

• visa, student loan, car, home equity

• cannot prioritize the debt snowball without knowing the interest rates on each debt

Which type of loan can be used for debt consolidation?

• Adjustable

• home equity loan

• balloon mortgage

• 15-year fixed