From their clients' credit card accounts

From their clients' savings accounts

From the Federal government

From their own money vaults

They charge a large, one-time fee at the start of the loan

They take out a small fee each month from your checking account

They charge a high interest rate on the loan

This is a trick question - they DON'T make money!

Mortgage

Overdraft

Credit Card

Pre-Paid Debit Card

Auto loan

Student loan

Mortgage

Overdraft

Because they usually have a higher interest rate

Because they usually have a lower interest rate

Banks give you an extra 90 days to make a missed payment

Banks typically don't charge interest for the first 12 months

Your relationship with the financial institution

Your credit score

The loan amount

Your level of education

True

False

The institution trusts you more, so they lower the interest

With each payment, principal increases; so interest lowers

Banks are legally required to lower interest rates over time

With each payment, principal decreases, so interest lowers

The term of the credit card

Annual Percentage Rate (APR)

Grace Period

Fees

Always make the minimum payment over time

Pay interest 1st, then pay what you can on leftover balance

Always make the full payment on time

Pay the principal 1st, then pay what you can on interest

You ar charged interest on the remaining balance

Your credit line is restored to its maximum amount

Credit card companies have permission to sell your information

It is the fastest way to pay off your debt

If you want to earn rewards and enjoy travel benefits

If you want a lower interest rate

If you want purchase protection & warranties

If you need a lump sum of money right away

You can pay them back in installments

You are charged a 1-time fee for the loan

Most people successfully pay these loans back

You need a credit card account to get one

higher, less

lower, more

higher, more

lower, less

You must give the car back when a lease has expired

Only a loan requires some kind of upfront payment

You make monthly payments on both

Monthly payments tend to be lower with a lease

True

False

After one missed payment, you can lose your home

You will be charged fees

Your credit score can take a hit

Foreclosure process starts after 30 days of missed payment

Fed loans have fewer and less flexible repayment options

Fed loans generally have higher interest rates

Private loan repayment may start while you're in school

Private loans don't require a cosigner, fed loans do

repayment begins the day after you graduate

a loan servicer will contact you before repayment begins

you are required to begin with the Standard Repayment Plan

you can choose from different repayment plans

They're both linked to a checking account in different ways

Some debit cards say VISA on them; credit cards don't

With a credit card, you are borrowing from yourself

A credit card can offer perks such as purchase protection