WorksheetsCredit & Fraud Review
Total questions: 25
Worksheet time: 45mins
Which of the following statements comparing credit and debit cards is TRUE?
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
Which of these credit payback strategies would lead to the HIGHEST overall cost?
Paying 20% of your credit card balance every month on time
Paying off your credit card bill in full every month
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
A loan with a shorter term length will have __________ monthly payments, and you will pay __________ in total interest.
higher, less
higher, more
lower, less
lower, more
Select the statement below that accurately describes a characteristic of a credit card.
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
Which of the following statements is CORRECT about secured loans?
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
As a young adult, all of the following are good strategies for building credit, EXCEPT:
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
Daniel has a credit card with a $1000 credit limit. His outstanding balance is currently $700. What is the maximum amount he can now spend on this credit card?
$300
$700
$1000
$1700
Which statement is true of both debit AND credit cards?
Both can trap you in an endless cycle of debt if you’re not careful
Both allow you to make purchases in a store or online
Both typically have interest rates between 10-30%
Both require you to pay a minimum monthly payment when your bill arrives
Which of the following statements about payday loans is TRUE?
Payday loans usually have low interest rates
Payday loans do not have any additional fees like other types of unsecured loans
To qualify for a payday loan you must have a checking account and excellent credit score
Payday loans get borrowers into a sometimes inescapable cycle of borrowing money because of the high interest rates and fees
Why are payday loans so popular?
They are a fast, easy way to save money and budget effectively
They are accessible to people who need to borrow small amounts of money and don’t have any better options
They meet the need for quick cash for very large purchases such as cars and homes
They are a terrific way to build your credit history and improve your credit score
If you are using the Snowball Method to get out of debt, which debt do you focus on first after you've made all of your minimum payments?
The debt with the lowest balance
The debt with the highest balance
The debt with the highest interest rate
The debt with the lowest interest rate
Which of the following is a type of secured debt in which the item you purchased might be seized if you fail to make payments?
Credit card
Student loan
Auto loan
Personal loan
All of the following appear on your credit report EXCEPT…
Your checking account balance
Student loan payment history
Balance owed on a car loan
Number of active credit accounts
It’s beneficial to use some of your available credit because…
The interest you’ll be charged goes up for every month you don’t use any credit
Banks require you to use some form of credit in order to have an account with them
It shows you can responsibly use credit and builds your credit history
Employers are less likely to hire you if you don’t have a balance on your credit card
What benefits do you receive by taking out a loan with a cosigner?
You don’t get penalized for late payments
You get a discount on future loans after this one is paid off
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
You automatically get the same credit score as the cosigner once the loan is paid off
What is a benefit of using a credit card rather than a debit card for online shopping?
Items are less expensive when purchased with a credit card than a debit card.
Credit cards can be used for online or in person purchases, while debit cards can only be used for online purchases.
Consumers using a credit card avoid interest charges, while consumers using a debit card must make periodic interest payments.
Consumers using a credit card face less loss in case of fraud or theft than consumers using a debit card.
A woman receives a call telling her a distant relative left her an inheritance. The caller identifies himself as the attorney for the relative. The attorney says if she will provide her bank account information, he will deposit the funds into the account the next day.
Which type of fraudulent solicitation has been committed?
phishing
identity theft
ponzi scheme
advance fee scheme
A friend invites a man to an investment meeting. At the meeting, the man finds out that if he agrees to invest in the company and finds two other individuals to invest, he can begin to make commissions off of the sales of those lower individuals. If he grows his team enough, she may be able to stop selling and profit off of other people’s work.
Why should the man be skeptical of the investment plan described in the text?
He may become a victim of identity theft.
He may become a victim of Internet fraud.
He may become a victim of an online scam.
He may become a victim of a pyramid scheme.
A woman receives a letter saying she has won a contest prize. The prize is free, but she needs to pay the shipping cost. Once they receive her check for the shipping cost, they will mail her prize.
Which type of fraud is being committed?
ponzi scheme
pyramid scheme
identity theft
advance fee scam
Which of the following is NOT a strategy to protect against identity theft?
never respond to unsolicited emails asking for credit cards, passwords, or other financial or security information
always shred financial statements and receipts that show account-related information
reconcile your monthly account information to make sure there are not any unauthorized transactions
never use credit cards online since nearly all identity theft occurs online
An individual claims that he is the sole owner of a company that promises large returns with little risk to investors. He fulfills his promise by using the investments of new investors to pay the earlier investors.
What type of fraudulent investment practice is the individual using?
advance fee scam
pyramid scheme
ponzi scheme
phishing scam
Why do people most likely register with the National Do Not Call Registry?
to receive fewer calls from telemarketers
to commit to avoiding phone calls while driving
to protest against outsourcing customer call centers
to reduce costs by limiting calls from unknown numbers
Why should you monitor your credit report regularly?
To keep track of your spending habits
To detect unauthorized accounts or errors
To see how much money you have saved
To find better credit card offers
Which of the following is NOT a safe practice for protecting personal information online?
Regularly updating your passwords.
Using public Wi-Fi to access banking sites.
Enabling two-factor authentication on accounts.
Reviewing privacy settings on social media accounts.
The FTC, Federal Trade Commission, regulates
US Banking System
Employee Rights
Consumer Protections
Sale of Stocks
