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Financial Peace Test Chapter 4-6
Terms in this set (45)
A widely held, but mistaken belief
Mortgage loans where the interest rate is adjusted periodically
A drop in the value of property
A tax on the poor and people who can't do math
The debt snowball
Baby Step 2
Most expensive way to finance a new car
Using equity in a home as collateral when borrowing money
Home Equity Loan
Combining separate debt payments into one single payment
A product aggressively marketed to consumers
Advertising aimed at creating consumer awareness for a product
The true cost of something in terms of what you give up
Borrowing money and paying over time
Used in real estate to catch the consumer's eye
Finding the right place in the store for a product
Financing as a marketing tool
90 Days Same-as-Cash
Causes some pain when purchases with cash
Doubting a purchase
Buying an item without thinking about it first
Experian, TransUnion, Equifax
The percent of total debt each creditor gets when you can't make minimum payments
Court action that allows a lender to take wages directly from a paycheck
Stays on your credit report for 10 years
Chapter 7 Bankruptcy
The only information that can be legally removed from your credit bureau report
Place a fraud victim alert on your credit report after this happens
Legal procedure for dealing with debt problems (filed under chapters)
Payday lending and cash advance companies are aggressively targeting which group of people?
Why do people think that the home equity loan is a good idea?
There is a good tax refund; it serves as a substitute for an emergency fund; it's a way to consolidate debt.
Why is gazelle intensity so important in getting out of the cycle of debt?
So you aren't stuck in debt forever; to help build momentum.
In which type of loan would you used your house for collateral?
How is a debit card like a credit card?
They both have the Visa or MasterCard logo; A debit card can be swiped and require your signature like a credit card.
Baby Step 2 is:
pay off all debt using the debt snowball
Why should you avoid lending money?
The relationship changes; the relationship often ends completely; the person borrowing the money is in bondage to you.
What is the best way to buy a car?
purchased used (2 years or older)
What is the problem with using credit cards if you pay or balance off each month?
You are spending an average of 12-18% more when you use a credit card; you are more apt to buy on impulse rather than thinking about a purchase.
Which type of mortgage is the best option, particularly if your are going to move in five to seven years?
The main difference between debit and credit cards is:
A debit card requires that you have the cash available int he account; a credit card doesn't.
What concept is best explained by the statement, "Money spent here cannot be spent there"?
When should you send a cease and desist letter to creditors?
Only in the most extreme situations
A collector is taught to:
evoke strong emotions
How often should you talk to a creditor?
every 2 weeks
What is a key feature in computing your FICO score?
An overdue payment is called:
The homeowner can't make payments on the mortgage and the lender takes the property:
To reclaim possession of an item because the borrower failed to make payments: