Podcast
Questions and Answers
Predatory lenders get their negative reputation from?
Predatory lenders get their negative reputation from?
Charging high fees for loans and targeting desperate people
Credit cards that offer flashy rewards like airline miles often?
Credit cards that offer flashy rewards like airline miles often?
Charge a high annual fee
Car lease agreements come with a stipulation that you must pay a penalty if you___________.
Car lease agreements come with a stipulation that you must pay a penalty if you___________.
Go over the pre-established mileage cap
When looking over your credit report, it's important to make sure?
When looking over your credit report, it's important to make sure?
Your greatest tool to building wealth is _____________.
Your greatest tool to building wealth is _____________.
A credit score is an indicator of how well someone pays off their debt, not how well they handle money.
A credit score is an indicator of how well someone pays off their debt, not how well they handle money.
The smartest way to buy a car is to ________________.
The smartest way to buy a car is to ________________.
Credit card companies charge stores a 2-3% fee for every purchase made with credit cards. This is called a(n)...
Credit card companies charge stores a 2-3% fee for every purchase made with credit cards. This is called a(n)...
The debt snowball method involves...
The debt snowball method involves...
_____________ require the borrower to put up collateral for the loan.
_____________ require the borrower to put up collateral for the loan.
Which is an example of an appreciating asset?
Which is an example of an appreciating asset?
Credit card companies make the most profit from _______________.
Credit card companies make the most profit from _______________.
When you finance a new car, you will end up paying more than the sticker price.
When you finance a new car, you will end up paying more than the sticker price.
Leasing a car is a method of financing where someone __________________.
Leasing a car is a method of financing where someone __________________.
What is The Second Foundation?
What is The Second Foundation?
When you buy with credit, you typically spend more than you would with cash or a debit card.
When you buy with credit, you typically spend more than you would with cash or a debit card.
When a homeowner takes out a home equity line of credit (HELOC), that loan can only be used for home repairs and renovations.
When a homeowner takes out a home equity line of credit (HELOC), that loan can only be used for home repairs and renovations.
Banks and lenders use credit scores to determine...
Banks and lenders use credit scores to determine...
How you spend and give your money...
How you spend and give your money...
A car is a depreciating asset.
A car is a depreciating asset.
The _______________ is the total amount of the car loan, plus taxes and fees.
The _______________ is the total amount of the car loan, plus taxes and fees.
There are certain things, like renting a car or booking a hotel room, that you cannot do without having a credit card.
There are certain things, like renting a car or booking a hotel room, that you cannot do without having a credit card.
Once you turn 18, you should regularly check your credit report...
Once you turn 18, you should regularly check your credit report...
Something that credit card commercials don't show you is...
Something that credit card commercials don't show you is...
Which of the following is part of the formula that determines a person's FICO score?
Which of the following is part of the formula that determines a person's FICO score?
Loans that directly help you advance in life, such as student loans, are acceptable debts.
Loans that directly help you advance in life, such as student loans, are acceptable debts.
What is the best way to avoid falling into debt?
What is the best way to avoid falling into debt?
Credit isn't a wealth-building tool, it's a business that makes money for...
Credit isn't a wealth-building tool, it's a business that makes money for...
Making purchases with a credit card means that you're borrowing money with interest, and ______ pay much higher interest rates.
Making purchases with a credit card means that you're borrowing money with interest, and ______ pay much higher interest rates.
While it may not always appear so, the majority of Americans live paycheck to paycheck.
While it may not always appear so, the majority of Americans live paycheck to paycheck.
Explain why debt and credit are a bad idea. How could they negatively affect your life?
Explain why debt and credit are a bad idea. How could they negatively affect your life?
What is the danger of putting up collateral for a loan?
What is the danger of putting up collateral for a loan?
Explain why the importance of a good credit score is a myth.
Explain why the importance of a good credit score is a myth.
List three ways the credit card industry makes money off of customers.
List three ways the credit card industry makes money off of customers.
What is the difference between an appreciating asset and a depreciating asset? Give examples of both.
What is the difference between an appreciating asset and a depreciating asset? Give examples of both.
Describe marketing tactics that the credit industry uses to trick people into getting into debt.
Describe marketing tactics that the credit industry uses to trick people into getting into debt.
Explain the debt snowball method. How can it help you get out of debt?
Explain the debt snowball method. How can it help you get out of debt?
Flashcards
Predatory Lending
Predatory Lending
Loans with excessively high interest rates and fees, targeting individuals in financial distress.
Credit Card Rewards Fees
Credit Card Rewards Fees
Rewards programs on credit cards may come with hefty annual fees.
Lease Mileage Penalties
Lease Mileage Penalties
Penalties incurred for exceeding the agreed-upon mileage limit in a car lease.
Cash Purchase for Cars
Cash Purchase for Cars
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Credit Report Monitoring
Credit Report Monitoring
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Credit Score
Credit Score
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Debt Snowball Method
Debt Snowball Method
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Acceptable Debt
Acceptable Debt
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Appreciating Assets
Appreciating Assets
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Depreciating Assets
Depreciating Assets
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Income for Wealth Building
Income for Wealth Building
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Credit Monitoring After 18
Credit Monitoring After 18
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Spending Habits and Values
Spending Habits and Values
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Credit Card Company Profits
Credit Card Company Profits
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Merchant Fees
Merchant Fees
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Living Paycheck to Paycheck
Living Paycheck to Paycheck
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Credit System Benefits
Credit System Benefits
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Collateral Loans
Collateral Loans
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Credit Card Marketing
Credit Card Marketing
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Car Loan Principal
Car Loan Principal
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Appreciating vs. Depreciating Assets
Appreciating vs. Depreciating Assets
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Credit Score Misconception
Credit Score Misconception
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High-Interest Credit for Young Consumers
High-Interest Credit for Young Consumers
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Avoiding Debt with Cash
Avoiding Debt with Cash
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Credit Card Revenue Streams
Credit Card Revenue Streams
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Credit Card Interest as Profit
Credit Card Interest as Profit
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Study Notes
Predatory Lending and Fees
- Predatory lenders target desperate individuals, charging exorbitant fees for loans.
- Credit cards with rewards, like airline miles, often come with high annual fees.
Car Financing and Lease Agreements
- Exceeding the pre-established mileage cap in car leases incurs penalties.
- The best strategy for buying a car is to pay in cash to avoid high-interest payments.
Credit Reports and Credit Scores
- It’s crucial to check credit reports to ensure no unauthorized accounts exist.
- A credit score assesses debt repayment behavior rather than overall money management.
Debt Management Strategies
- The debt snowball method prioritizes paying off debts from smallest to largest.
- Acceptable debt, such as student loans, is often a misconception; they can still lead to financial strain.
Assets and Wealth Building
- An appreciating asset, like a home, increases in value over time, while a car is a depreciating asset that loses value.
- Your income is your most powerful tool for building wealth.
Importance of Financial Awareness
- Regularly checking your credit report after turning 18 helps monitor for identity fraud.
- Spending habits reflect personal values; being aware can guide better financial choices.
The Credit System and Personal Finance
- Credit card companies profit primarily through interest charged to customers who carry balances.
- Merchant fees are typically charged to stores for credit card transactions.
The Reality of Debt and Spending
- Most Americans live paycheck to paycheck, often struggling with debt cycles.
- Credit is a business that benefits institutions like banks and credit card companies, not consumers.
Risks of Credit and Loans
- Collateral loans pose risks; failure to repay leads to losing the collateral.
- Credit card marketing often obscures the long-term costs of debt, emphasizing immediate benefits.
Understanding Financial Terms
- Principal refers to the total amount of a car loan after including taxes and fees.
- Knowing the difference between appreciating and depreciating assets is crucial for making informed investments.
Financial Misconceptions
- The perceived necessity of a good credit score can be misleading; it does not equate to financial stability.
- High-interest credit purchases expose young consumers to financial difficulties.
Strategies to Avoid Debt
- The best approach to avoid debt is to make purchases only with available cash.
- Understanding how credit cards make money through various fees can inform smarter financial decisions.
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