Please read through the following questions and based on your week 2 material, highlight or underline the correct answer. Please submit quiz no later than midnight Sunday.
1) What is the main disadvantage of using only a debit card?
a. Debit card purchases are not reported to credit reporting agencies and therefore will not help you build your credit score.
b. Not all stores accept debit cards.
c. You may earn better rewards with a credit card.
d. Credit cards offer fewer protections if your card is lost or stolen.
2) When selecting and using a debit card, you should avoid
a. monitoring your account every other day
b. prepay cards that allow you to load more money onto them
c. debit cards tied to your checking account
d. overdraft protection that allows you to spend more than you have
3) Which of the following is not an effective way to think about money?
a. Live below your means but within your needs.
b. Only purchase needs, not wants.
c. Financial freedom requires making a lot of money.
d. Pay yourself first.
4) The smartest way to build an emergency fund is to
a. set aside small amounts monthly through an automatic savings plan
b. open a home equity line of credit (HELOC) that you can tap into in case of emergency
c. take out multiple credit cards with high credit limits that you can tap into in emergencies
d. go on a strict budget and save as much as possible until you have an emergency fund
5) How much money should you have in your emergency savings account?
a. An amount that will safely cover your bills for three to six months
b. An amount equal to eight months of your living
c. An amount between $2,500 and $5,000 to cover sudden, unexpected expenses
d. Three months of your wages
6) The best place for your emergency savings fund is
a. in a liquid account at a bank or credit union that offers you the highest interest rate possible
b. in a fireproof safe within your home; you want to be able to get to your money quickly in an emergency
c. in your checking account or your debit-card account so you can get it right away-keep a mental note of what part of your balance is to be spent only on emergencies
d. in a Roth IRA-you can always withdraw your contributions without a penalty or tax
7) How do you make sure the money you deposit at a bank or credit union is 100% safe-that you are guaranteed to get every penny back no matter what?
a. Keep the money in a checking or savings account, not a money-market fund.
b. Keep cash in a safe-deposit box at a bank that you have access to seven days a week.
c. Just make sure your balance is never more than $50,000 at a single bank or credit union, because that is the limit that financial institutions can guarantee.
d. Confirm that a bank is a member of the Federal Deposit Insurance Corp. (FDIC) or a credit union is a member of the National Credit Union Share Insurance Fund (NCUSIF), and never have more in your account than the maximum insured amount.
8) What is the maximum dollar amount the Federal Deposit Insurance Corp. (FDIC) ensures in a single account?
a. $150,000
b. $200,000
c. $250,000
d. $500,000
9) If the money you have coming in each month (your take-home pay) is less than the money going out each month to pay the bills, you should
a. make up the difference by using a credit card with a very low interest rate
b. stop paying your credit card in full; paying just the minimum due gives you more money each month
c. look through your spending for the single biggest expense you can eliminate completely to make your income equal what you spend
d. find ways to trim spending from multiple spending categories till you have made up the shortfall
10) To intelligently reduce your spending over the long term
a. mark all the needs in your spending categories and get rid of them completely
b. never carry cash or credit cards on your person
c. consider scaling back on the frequency of certain expenses, such as how many times a month you eat out or go to the movies
d. limit your trips to stores or malls to just once a month