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Module 7
1.! Pick examples of “debt that may be necessary” for most people from the choices
below. Answer _____
a.
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A mortgage to purchase a home.
b.
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Reasonable student loans to complete a college education.
c.
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Running up a credit card balance for a spring break trip.
d.
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A and b above.
2.! Why is carrying a balance on a credit card considered a “debt to avoid”
Answer _____
a.
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Because of the high interest rate.
b.
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Because if you make a late payment, the credit card company may raise your
interest rate to around 30% APR.
c.
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Because the credit card company would be able to repossess your car if you
stopped making payments on your credit card.
d.
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A and b above
3.! Why are Rent-to-Own contracts, Auto Title Loans, and Payday Loans “debts to
avoid”. Answer ____
a.
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Because the business locations are sometimes hard to find.
b.
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Because they are very expensive.
c.
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Because the loan activity is not reported to the credit reporting agencies.
d.
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B and c above are correct.
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Name _____________________ WSUID______________________
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