Clodfelter | E208 | Managing Credit

What does 'Annual Percentage Rate (APR)' refer to?

• The total amount of money borrowed

• The cost you pay each year to borrow money, including fees, expressed as a percentage

• The interest rate charged monthly

• The total interest paid over the life of a loan.

Fill in the blank: 'Chapter 7 Bankruptcy' is also known as ________ bankruptcy.

• reorganization

• liquidation

• consolidation

• discharge

What is the role of the Consumer Financial Protection Bureau (CFPB)?

• To collect taxes

• To protect consumers by regulating financial products and services

• To provide loans to students

• To manage the stock market.

Credit Utilization Rate is a measurement of your outstanding debt divided by your total available credit. A general rule of thumb is to keep this under ____.

• 10%

• 20%

• 30%

• 40%

What is the definition of 'Debt'?

• Money you owe to a person or business

• A type of loan

• A repayment method

• A financial plan

The 'Debt Avalanche Method' prioritizes paying down debts with the ________.

• smallest balances first

• highest interest rates first

• lowest interest rates first

• largest balances first

What is a 'Debt Consolidation Loan'?

• A loan that combines existing debts into one monthly payment

• A method of paying debts with the smallest balances first

• A plan to reduce interest rates

• A high-risk company.

A 'Debt Management Plan' is created by a ________.

• creditor

• debt management company

• consumer

• bank

What does a 'Debt Relief Company' do?

• Charges high fees and claims to eliminate a person's debt

• Offers low-interest loans

• Provides financial advice

• Manages investment portfolios

'Debt Settlement' involves an agreement where the total debt balance is ________.

• A) increased

• B) reduced

• C) unchanged

• D) transferred