Credit and Debt Review

Which of the following is typically a SECURED loan?

• Auto Loan

• Student loan

• Credit Card Balance

• Overdraft

If the collateral for your secured loan can be taken away, why get a secured loan at all?

• Because they usually have a higher interest rate

• Because they usually have a lower interest rate

• Banks give you an extra 90 days to make a missed payment

• Banks typically don't charge interest for the first 12 months

What may NOT impact the interest rate on your loans?

• Your relationship with the financial institution

• Your credit score

• The loan amount

• Your level of education

Tags

CCSS.6.RP.A.3C

True or False: A cosigner's credit history can be affected by the loan they are cosigned on.

• True

• False

Why does the amount of INTEREST you owe on a loan decrease over time?

• The institution trusts you more, so they lower the interest

• With each payment, principal increases; so interest lowers

• Banks are legally required to lower interest rates over time

• With each payment, principal decreases, so interest lowers

Tags

CCSS.7.RP.A.2B

What is the purpose of a Schumer box when applying for a credit card?

• It summarizes information like interest rates, fees, and grace periods

• It summarizes how much interest you have accrued in the last 90 days

• It gives a detailed explanation of your credit history

• It tracks your spending habits to help you find ways to budget your money

How do you avoid paying interest on your credit card (or any other loan for that matter)?

• Always make the minimum payment over time

• Pay interest 1st, then pay what you can on leftover balance

• Always make the full payment on time

• Pay the principal 1st, then pay what you can on interest

Tags

CCSS.7.RP.A.3

Which is TRUE when you make only the minimum payment each month?

• You ar charged interest on the remaining balance

• Your credit line is restored to its maximum amount

• Credit card companies have permission to sell your information

• It is the fastest way to pay off your debt

When can personal loans be a better option than credit cards? (hint: choose 2 correct answers)

• If you want to earn rewards and enjoy travel benefits

• If you want a lower interest rate

• If you want purchase protection & warranties

• If you increase your credit score

A shorter auto loan term means ____ monthly payments & ____ total interest you'll pay.

• higher, less

• lower, more

• higher, more

• lower, less

Tags

CCSS.7.RP.A.3