Types of Credit - Unit Test

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 student loan

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

Constant, Increases, Increases

Constant, Decreases, Increases

Variable, Decreases, Increases

Variable, Decreases, Decreases

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

All 3 cards are completely different

Debit cards and prepaid debit cards are the same

Debit cards and credit cards are the same

All 3 cards are completely the same

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 after the due date, the credit card company will not charge you interest

25 days is an exceptionally long period without paying a credit card bill

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

higher, less

higher, more

lower, less

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

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

$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 higher than 14.99%

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