Personal Finance- Debt

Annual Percentage Rate Cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan
Depreciation A decrease or loss in value
Credit Report A detailed report of an individual’s credit history
Loan Term Time frame that a loan agreement is in force, and before or at the end of which the loan should either be repaid or renegotiated for another term
Credit Card Type of card issued by a bank that allows users to finance a purchase
Credit Score A measure of an individual’s credit risk; calculated from a credit report using a standardized formula
Annual Fee A yearly fee that’s charged by the credit card company for the convenience of the credit card
Debt Snowball Preferred method of debt repayment; includes a list of all debts organized from smallest to largest balance; minimum payments are made to all debts except for the smallest, which is attacked with the largest possible payments
False You must establish credit in order to buy a house
False If you are a victim of identity theft, you are only responsible for paying back half of the debt
Paying cash for all purchases Which of the following is NOT a factor in determining a FICO score?
Borrow money from your parents to pay off the debt Which of the following is not a good idea for getting out of debt?
Go into debt Which of the following things cannot be done with a debit card but can be done with a credit card?
You want a fixed rate mortgage Why is an adjustable rate mortgage (ARM) a bad idea?
You end up paying more of your car because of interest Why is financing a car a bad idea?
You could go bankruptcy and may not be able to ever get out of debt. You are limited to what you can do Negative Debt. How it effects on your future?
Make sure billing statements arrive on time and check your checkbook What are some things you can do to protect your personal information?
You keep paying of the least expensive debt until you have all of your debt payed off Explain how the debt snowball works
I love debt FICO is known as…
The relationship will be strained or destroyed If I loan money to a friend or relative, I will be helping them.. this is a myth because
The bank requires a co-signer because the person isn’t likely to repay. Be ready to pay the loan and have your credit damaged By co-signing a loan, I am helping out a friend or relative…. this is a myth because
A 15 year fixed rate mortgage; Long term money!! What is the best mortgage for buying a house?
A debit card does all of that. You can’t go into debt with a debit card unlike a credit card You need a credit card to rent a car or make a purchase online or by phone… this is a myth because
The FICO score is an I love debt score You need to take out a credit card or car loan to “build up your credit score”…. this is a myth because
Yes Can you live without a credit score?

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