Economics Foolproof Module 1 & 2 Questions and Answers

Economics Foolproof Module 1 & 2 Questions and Answers T/F: Most online financial institutions & businesses will regularly send you emails asking you to update your account information by going to a link in their email. False If you mismanage your checking account by bouncing checks repeatedly or ignoring overdraft notices, which of the following results may happen to you? All of the above Which answer applies to "fine print"? - Fine print is usually where virtually all the important information is located. - You should always read the fine print. - The fine print is always the print you want to ignore. - Many companies like fine print because you can be confused by it, & make the wrong decision. You owe $1,000 on a credit card & choose to pay the minimum payment each month. Which answer is correct? - Credit card companies love you when you only make minimum payments. Why? You're throwing your money away by paying extra interest each month. - Making minimum payments means it could take thirty or forty years to pay off that $1,000 credit card bill. Having a bad credit history impacts every one of these items but one. Which is the one item not impacted by bad credit history? The fact that I am a good person. What statement is TRUE about "phishing scams"? Phishing scams cannot hurt you if you do not respond to them. What answer best describes a Nigerian scam? Nigerian scammers nearly always want you to send money back to them. In the module, we gave you a link to a true story called "Looking for a Roommate?". How much money did one girl lose in this Nigerian scam? $3,500 What is FoolProof's definition of "looking like a fool"? Falling for anything which makes companies & other people think you're too stupid or too young to know better. Do many companies like it when you look like a fool? Definitely. The job of many companies is to make money, not to do what is right for you. If you look like a fool, they make more money. Vinnie had many credit cards, & he did have fun with them. Then he nearly went broke. What was the main thing Vinnie did wrong? He used one credit card to pay other credit card bills. Which two statements give good definitions of financial credit? 1. Financial credit is an arrangement for you to pay at a later date. Loans & credit cards are forms of credit. 2. Financial credit is one way that lenders, businesses, & employers may judge an individual's trustworthiness. What is the best way to improve your credit? Make all your payments on time, every time. Good credit equals power. Which statement illustrates that power? Having good credit impacts what job you get & what you pay for products & services. Good credit helps bring independence. Which statement best illustrates the fact that good credit helps bring independence? Good credit can help you build a savings account. Because you pay less in interest when you have good credit, you are able to save more. Money in your pocket always gives you more options than not having money in your pocket. Good credit gives you options. Bad credit takes away your options. Choose the one correct answer. 1. You have good credit. You can choose the credit card with the lowest interest rate. 2. You have bad credit. You are forced to take the credit card which charges rip-off rates. T/F: Credit is an arrangement for you to pay at a later date. It is one way to determine trustworthiness. True Which of the following people has "paid on time," an important requirement in credit agreements? Josh has a 36-month loan for his new truck. Each month's payment is due by the 10th of the month. Josh always mails his coupon & payment by the first of the month. T/F: Many companies deliberately give you repayment plans that make sure it will take you decades to pay your debt. True What is a "debt-to-income" ratio? How much money you owe in total versus how much you make. Why do businesses or individuals considering giving you credit look at your "debt-to-income" ratio? They want to see if you have enough total income to pay off all your bills. If you have the income to pay off all your bills, you are probably a better "risk". T/F: Your parents' credit score determines your credit score. False T/F: You have to be rich to have a good credit score. False Which statement is true? It's really easy to mess up your credit score