test 4 Flashcards
what is an indicator of how well someone pays off their debt,not how well they handle money
A credit score
what is something that credit card commercials do not show you
people making monthly payments for years
are there certain things like renting a car or renting an airbnb that you can do without having a credit card
yes
what do banks and lenders use credit scores to determine
the likelyhood that someone is able to repay debt
when you look over your credit report, its important to make sure of what
no lines of credit have been open under your name without your knowledge
leasing a car is a method of financing where someone does what
make monthly payments on the car but does not own it
who pays higher intrest rates when making purchases with a credit card that your borrowing money with intrest
young people
why should you regularly check your credit report when you turn 18
signs of idenity fraud
what requires the borrower to put up collateral for a loan
secured loans
what stipulation comes when you sigh a car lease agreement and you have to pay a penalty for
go over the prestablished milage cap
what happens when ou finance a car
you will end up paying more than the stcker price
what do credit card compnies make the most profit from
charging intret to customers
are loans that directly help you advance in life acceptable loans
no
do the majority of americans live paycheck to paycheck
yes
what is the second foundation
get out of debt and stay out of debt
what is the smartest way to buy a car
buy it in cash
what does the debt snowball method involve
paying debts from smallest to largest
credit is a business that makes money for who
credit cards companies,lenders, banks
what is the formula that determines a person’s FICO score
there history payed to lenders
how you spend you money and give your money does what
is a reflection of your personal values
give an example of an appreciating asset
a house
what do predatory lenders get their reputation from
from charging high fees for loans and targeting desprate people
what is an example of a depreciating asset
car
what is your greatest wealth building tool
income
credit cards that offer flashy rewards often charge you what
high annual fees
what is the total amount of a car loan plus the taxes and fees
the principal
what happens when you buy with crdit vs. debit
you typically spend more with credit than you would with cash
explain why credit cards are a bad idea. how coukd this negativly affect your life
they are a bad idea since you will end up paying mor money in the long run leading you to increasing your debt
what is the best way to avoid falling inot debt
cash
list 3 ways the credit card industry makes money
intrest fees
annual fees
merchant fees
what is it called when credit cards companies charge 2-3% fee for every purchase made with credit cards
merchant fees
what is the danger of putting up collateral for a loan
you lose the asset if you fail to repay it
what is the difference bewteen an appreciating asset and a depreciating asset? give an example of both
an appreciating asset goes up in value over time like a car while a depreciating asset losses value over time like a car
explain the importance of good credit is a myth
because all credit is bad
describe marketing tactics that the credit indusrty uses to trick people into getting into debt
offering low or zero interst , requiring only minimum monthly payments, and offering cash back and other rewards
