4%

14%

40%

400%

Far more businesses accept credit cards than debit cards

Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard

Credit card companies provide you with a monthly statement, while debit cards do not

With debit cards, you're spending your own money at point of sale, but with credit cards, you're getting a loan that you need to pay back later

A credit card

A prepaid debit card

An auto loan

Every time you pay extra, the lender will reduce the interest rate they're charging by a small amount

The extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly

The extra payment will be applied to the interest you owe, which will reduce the overall cost of your loan

Amortized loans typically have much higher interest rates than credit cards, so they're the best place to put your extra cash

Find an extra source of income by taking a second job, working longer hours, or borrowing from family if they can afford to help

Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control

Continue making all payments and call your lenders and see if you can negotiate lower monthly payments, lower interest rates, or longer terms

Explore whether a free or non-profit credit counseling service could help

Variable, Decreases, Decreases

Fixed-rate mortgages have a constant payment every month, but an interest rate that increases throughout the term of the loan

Fixed-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions

Adjustable-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions

The two mortgages work the same way but are called different names depending if they come from a bank or a credit union

Paying off your credit card bill in full every month

Paying 20% of your credit card balance every month on time

Making the minimum payment (3% of your credit card balance) every month on time

Making the minimum payment (3% of your credit card balance) every month with an occasional late payment

The minimum monthly payment for payday loans is usually only $$10 or$$ 15, so a lot of interested accumulated

Upfront, Denise knew there would be $450 of fees attached to the loan, but she took out the loan anyway

Payday loans must be paid in full within two weeks, and if not, the only option is to renew the loan for a high penalty fee, which she did approximately 12 times

Denise not only paid the $$300 she owed, but she prepaid an extra$$ 450 in case she needs another loan in upcoming months

Put in $0 for your down payment, and choose a loan with a short term length

Put in $2500 for your down payment, and choose a loan with a short term length

Put in $3500 for your down payment, and choose a loan with a long term length

Put in $5000 for your down payment, and choose a loan with a long term length

When given a range of APRs like this, you can assume most cardholders pay the lowest rate listed

Your APR will be within that range, depending on the strength of your credit history

In this case, you want the highest APR in the range because you’ll earn more

The APR on credit cards is usually fixed, so it won’t be adjusted as long as you are a cardholder

It will not affect your credit score or credit history

Since it is tied directly to your checking account, it prevents you from spending money you do not have

If you need to carry a balance, the interest rates are generally quite low (less than 5%)

You can make an emergency purchase that you otherwise don’t have the money to pay for right now

If you make the minimum payment on your card within the 25 day period, the credit card company will not charge you interest

If you pay your previous balance in full by the due date, you will not be charged interest on new purchases

You will always be charged interest on new purchases regardless of when you pay your balance

The 25 days after the end of the billing cycle is referred to as the grace period

higher, more

lower, more

You owe the same payment every month

You must have money deposited into a checking account to use the credit card for purchases

Making full payments on-time every month is the only way to avoid interest charges

They do not charge interest

They are a good choice to use for student loans

If the borrower does not make payments, the lender can repossess the item

In the event of default, the borrower loses nothing except for the down payment

They usually have higher interest rates as compared with unsecured loans

Bargaining for a great sales price

Receiving a large down payment

Qualifying for a low interest rate

Having a wide selection of term lengths

Open a credit card, with your parent or guardian as a cosigner

Take out a payday loan

Become an authorized user on a credit card used by your parent or guardian

Open and use a secured credit card

Amy chose a shorter term for her mortgage, so her monthly payments are higher

Amy made a larger down payment, so her monthly payments are also larger

Chuck chose a shorter term for his mortgage, so his monthly payments are also lower

Chuck has a lower credit score, so his interest payments are also lower

Payday loans are only used by affluent households, and the banks know they have enough money to cover them

Payday loans are just another word for direct deposit, and almost all employers offer their employees direct deposit instead of a paper paycheck

Payday loans require proof of employment or other regular income but not a credit check

Payday loans are typically for such small dollar amounts that no one cares if you repay them or not

A loan taken from a bank

A large sum of money you pay when taking out a mortgage so that the principal of your loan is smaller

A type of insurance policy

A monthly installment for a mortgage

$200

$800

$1000

$1800

Depending on your creditworthiness, the APR for a borrower will always either be 8.99%, 10.99%, or 12.99%

There is an introductory APR that is valid only for 1 year, but then the permanent APR is lower than that at 8.99%

You will never be charged an APR higer than 14.99%

A 28.99% APR may be applied to your account for late payment

This is required by federal law for tax purposes

This allows the card holder to pay their bill quickly and close the card when they’re ready

This enables the credit card company to make more money

This helps cardholders develop financial independence