Debt, Paycheck and Taxes Quiz

What is the definition of debt?

• Money saved for future use

• Money owed to another person or company

• Money earned through investments

• Money given as a gift

What is a common marketing strategy used by credit card companies?

• Offering high interest rates

• Offering a low or zero interest introductory rate

• Providing no rewards

• Requiring large upfront payments

What happens when you only make the minimum monthly payment on a credit card?

• You pay off the debt quickly

• You will accumulate hidden fees

• You barely make a dent in the actual amount of debt

• You receive cash back rewards

What is collateral in the context of secured loans?

• The interest rate charged on a loan

• An asset offered as security for a loan

• A fee paid to the lender

• The total amount of debt owed

Which of the following best describes a depreciating asset?

• An asset that increases in value over time

• An asset that loses value over time

• An asset that has a fixed value

• An asset that has no value

What does the term "equity" refer to in home ownership?

• The total amount owed on a mortgage

• The increase in value of a home over time

• The interest rate on a home loan

• The market price of a home

What are the Three C’s used by creditors to assess creditworthiness?

• Capital, Capacity, Character

• Credit, Collateral, Cost

• Cash, Credit, Conditions

• Cost, Credit, Capital

What does the Fair Credit Billing Act (1974) allow consumers to do?

• Automatically cancel all debts

• Correct mistakes on credit accounts

• Avoid making payments on time

• Increase their credit limits without approval

What is a credit score?

• A detailed report of all transactions

• A three-digit number indicating the likelihood of repaying debt

• A measure of income stability

• A record of assets owned

Which agency is NOT a credit bureau?

• Experian

• TransUnion

• Equifax

• Visa