1) Where do banks get the money to lend out to consumers? a) From their clients' credit card accounts b) From the Federal government c) From their clients' savings accounts d) From their own money vaults 2) How do banks make money off of the credit they issue? a) They charge a large, one-time fee at the start of the loan b) They charge a high interest rate on the loan c) They take out a small fee each month from your checking account d) This is a trick question - they DON'T make money! 3) Which of the following is NOT a typical type of credit? a) Mortgage b) Credit Card c) Overdraft d) Pre-Paid Debit Card 4) Which of the following could be a SECURED loan? a) Auto loan b) Student loan c) Overdraft d) Line of Credit 5) If the collateral for your secured loan can be taken away, why get a secured loan at all? a) Because they usually have a higher interest rate b) Banks give you an extra 90 days to make a missed payment c) Because they usually have a lower interest rate d) Banks typically don't charge interest for the first 12 months 6) What may NOT impact the interest rate on your loans? a) Your relationship with the financial institution b) The loan amount c) Your credit score d) Your level of education 7) True or False: A cosigner's credit history can be affected by the loan they are cosigned on. a) True b) False 8) Why does the amount of INTEREST you owe on a loan decrease over time? a) The institution trusts you more, so they lower the interest b) Banks are legally required to lower interest rates over time c) With each payment, principal increases; so interest lowers d) With each payment, principal decreases, so interest lowers 9) What information is NOT on a Schumer Box? a) The term of the credit card b) Grace Period c) Annual Percentage Rate (APR) d) Fees 10) How do you avoid paying interest on your credit card (or any other loan for that matter)? a) Always make the minimum payment over time b) Always make the full payment on time c) Pay interest 1st, then pay what you can on leftover balance d) Pay the principal 1st, then pay what you can on interest 11) Which is TRUE when you make only the minimum payment each month? a) You are charged interest on the remaining balance b) Credit card companies have permission to sell your information c) Your credit line is restored to its maximum amount d) It is the fastest way to pay off your debt 12) When can personal loans be a better option than credit cards? a) If you want to earn rewards and enjoy travel benefits b) If you want purchase protection & warranties c) If you want a higher interest rate d) If you need a lump sum of money right away 13) Which is TRUE about Payday loans? a) You can pay them back in installments b) Most people successfully pay these loans back c) You are charged a 1-time fee for the loan d) You need a credit card account to get one 14) A shorter auto loan term means ____ monthly payments & ____ total interest you'll pay. a) higher, less b) higher, more c) lower, more d) lower, less 15) Which of the following is TRUE about an auto LOAN and a LEASE? a) You must give the car back when a lease has expired b) You make monthly payments on both c) Only a loan requires some kind of upfront payment d) Monthly payments tend to be higher with a lease 16) True or False: Landlords are required to submit your payment history, which can boost your credit score. a) True b) False 17) Which is FALSE about what can happen if you fail to make your mortgage payments? a) After one missed payment, you can lose your home b) Your credit score can take a hit c) You will be charged fees d) Foreclosure process starts after 30 days of missed payment 18) How do federal student loans differ from private student loans? a) Fed loans have fewer and less flexible repayment options b) Private loan repayment may start while you're in school c) Fed loans generally have higher interest rates d) Private loans don't require a cosigner, fed loans do 19) When repaying your Federal student loans... a) repayment begins the day after you graduate b) you are required to begin with the Standard Repayment Plan c) a loan servicer will contact you after repayment begins so you need to contact them first d) you can choose from different repayment plans 20) How are credit cards and debit cards different? a) They're both linked to a checking account in different ways b) With a credit card, you are borrowing from yourself c) Some debit cards say VISA on them; credit cards don't d) A credit card can offer perks such as purchase protection

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