The debt snowball method involves . . .

Paying off debts from smallest to largest

Credit card companies make the most profit from ______.

Charging interest to customers who only pay part of their balance

Banks and lenders use credit scores to determine . . .

The likelihood that someone is able to repay the debt

The purpose of an emergency fund is to . . . .

Be able to cover unexpected expenses with cash

Attack smallest debt with largest possible payment

Leasing a car is a method of financing where someone _____.

Makes monthly payments but does not own the vehicle

Once you turn 18, you should regularly check your credit report . . .

For errors or signs of identity theft

Banks and lenders use credit scores to determine . . .

The likelihood that someone is able to repay a debt

Which of the following is part of the formula that determines your FICO score?

Their history of payments made to lenders.

Annual Percentage Rate (APR)

interest rate for borrowing money

Borrowing money and paying over time

What is the Second Foundation?

Get out of debt and stay out of debt

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Ram Ch 3 & 4

25 termsStudBud Administration508 plays

Consumers Ed on dangers of debt and consumer awareness

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Questions 25

Answers

1
While saving money isn't easy at first, it will make your life _______ in the future.
Easier
Longer
Poorer
Harder
2
Credit
cost in terms of what you have to give up
decline in value
borrowing money and paying overtime
money owed
3
The debt snowball method involves . . .
Paying off debts from smallest to largest
Paying off debts from largest to smallest
Pooling together money from other people to pay off your debt
Waiting until the winter months to begin paying off debt
4
Depreciation
Your belief system
decline in value
regretting a purchase
money owed
5
Credit card companies make the most profit from ______.
Incentive programs with banks
Government tax breaks
Charging interest to customers who only pay part of their balance
Partnering with companies to offer rewards to customers
6
The smartest way to buy a car is to ______.
Lease it
Take out a personal loan for it
Pay cash for it
Finance it but pay the debt as quickly as you can
7
_______ require the borrower to put up collateral for the loan.
Interest rates
Unsecured loans
Revolving credit
Secured loans
8
Banks and lenders use credit scores to determine . . .
A person's financial responsibility
How much collateral someone has available to put up for a loan
The likelihood that someone is able to repay the debt
How successful someone is.
9
45% of Americans have less than $1,000 saved for an ______.
New smart phone
Retirement fund
Emergency
Car
10
The purpose of an emergency fund is to . . . .
Have some extra money for big purchases.
Be able to cover unexpected expenses with cash
Teach you how to invest in growth stock mutual funds
Buy a Mother's Day gift if you forgot about it
11
If you really want to save money you've got to . . .
Live on less than you make
Have a financial advisor
Invest in a roth IRA
Fly economy class
12
Debt snowball
Attack smallest debt with largest possible payment
Borrowing money and paying over time
interest rate for borrowing money
Decline in value
13
Leasing a car is a method of financing where someone _____.
Is paying off two or more vehicles at the same time
Does not have to pay any taxes on the vehicle for the first 6 months
Makes monthly payments but does not own the vehicle
Never pays any interest or fees.
14
Once you turn 18, you should regularly check your credit report . . .
To keep an eye on your credit score
Only if you have a credit card
To make a plan for improving your credit score
For errors or signs of identity theft
15
Which principle says that a certain amount of money today is worth MORE than the same amount later.
The time value of money
Inflation
Principal interest
Rate of return
16
Which is an example of an appreciating asset?
A piece of farming equipment
Computer used for business purposes
A new car purchases within the last 6 months
A home
17
Banks and lenders use credit scores to determine . . .
A person's financial responsibility
How successful someone is.
The likelihood that someone is able to repay a debt
How much collateral someone has to put up for a loan
18
Which of the following is part of the formula that determines your FICO score?
Their history of payments made to lenders.
The percent of income that they invest into mutual funds
The dollar amount in their savings funds
Their income level for a year
19
Annual Percentage Rate (APR)
interest rate for borrowing money
Decline in value
Borrowing money and paying over time
Cost in terms of what you give up
20
To get out of debt, you must quit _____ money.
borrowing
printing
spending
wasting
21
Financing
Borrowing money and paying over time
regretting a purchase
interest rate for borrowing money
cost in terms of what you have to give up
22
MYTH: ____ payments are a way of life and you'll always have one.
Rent
car
Netflix
Utility
23
What is the Second Foundation?
Get out of debt and stay out of debt
Build wealth and give
Pay cash for your car
Save $500 for an emergency fund
24
Your greatest wealth building tool is your _______.
Tax cuts
income
Single stocks
credit score
25
Buying used cars is a good way to minimize depreciation.
False
True

Ram Ch 3 & 4 Flashcards | StudBud