Question 1

Unsecured lines of credit are easy to use and often use some form of collateral as default protection.

Accepted Answer

A) True 
 B)False

Question 2

An overdraft protection line of credit allows one to routinely bounce checks with little or no adverse consequences.

Accepted Answer

A) True 
 B)False

Question 3

A credit applicant will be granted credit only after establishing a complete file at the local credit bureau.

Accepted Answer

A) True 
 B)False

Question 4

The market value of your house is $175,000 and you have a first mortgage balance of $100,000.If a lender requires a 80% loan-to-market value ratio,how large could your home equity loan be?

Accepted Answer

($175,000

Question 5

Thirty-day or service credit accounts include utility bills,medical services,and credit card accounts.

Accepted Answer

A) True 
 B)False

Question 6

The more credit cards one has,the better one's credit score.

Accepted Answer

A) True 
 B)False

Question 7

Bank credit card cash advances will begin accruing interest charges immediately.

Accepted Answer

A) True 
 B)False

Question 8

Credit report is routinely used to predict credit worthiness.

Accepted Answer

A) True 
 B)False

Question 9

The proceeds of a home equity loan can be used for just about any purpose,and the interest paid is usually tax deductible.

Accepted Answer

A) True 
 B)False

Question 10

The following are methods used to obtain personal information for identity theft except:

Accepted Answer

A)  lost or stolen wallet/credit card 
B)  family,friends,acquaintances 
C)  corrupt employees 
D)  stolen mail 
E)  all the above are methods used 
A)  lost or stolen wallet/credit card 
B)  family,friends,acquaintances 
C)  corrupt employees 
D)  stolen mail 
E)  all the above are methods used

Question 11

Federal law provides no protection for losses resulting from lost or stolen ____ cards.

Accepted Answer

A)  debit 
B)  credit 
C)  affinity 
D)  retail 
E)  prestige 
A)  debit 
B)  credit 
C)  affinity 
D)  retail 
E)  prestige

Question 12

For a person who sometimes pays his entire credit balance and sometimes pays the minimum payment,which calculation method would be the least expensive?

Accepted Answer

A)  average daily balance including new purchases 
B)  average daily balance excluding new purchases 
C)  two-cycle average daily balance including new purchases 
D)  two-cycle average daily balance excluding new purchases 
E)  both b and d would produce the same,low finance charge 
A)  average daily balance including new purchases 
B)  average daily balance excluding new purchases 
C)  two-cycle average daily balance including new purchases 
D)  two-cycle average daily balance excluding new purchases 
E)  both b and d would produce the same,low finance charge

Question 13

The ____ is really a second mortgage on your home.

Accepted Answer

A)  affinity card 
B)  unsecured personal credit line 
C)  home equity line of credit 
D)  preferred Visa card 
E)  platinum American Express card 
A)  affinity card 
B)  unsecured personal credit line 
C)  home equity line of credit 
D)  preferred Visa card 
E)  platinum American Express card

Question 14

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-The most expensive method of determining finance charges on revolving credit would be [two cycle ADB w/purchases | ADB excluding purchases].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 15

Denise (a single taxpayer)contributes $6,000 annually to her church.In addition,she owns a home in which she has $20,000 equity,and she itemizes deductions.If she pays $1,000 interest on credit cards,$6,000 interest on her home equity loan,and is in the 26% marginal tax bracket,calculate Denise's tax savings from these interest payments.

Accepted Answer

$6,000 *0.26 = $1,56

Question 16

____ are not a type of open account credit.

Accepted Answer

A)  Retail charge cards 
B)  30-day charge accounts 
C)  Travel and entertainment cards 
D)  Bank credit cards 
E)  Bank debit cards 
A)  Retail charge cards 
B)  30-day charge accounts 
C)  Travel and entertainment cards 
D)  Bank credit cards 
E)  Bank debit cards

Question 17

A credit limit refers to the maximum amount the cardholder can owe the issuer at any point in time.

Accepted Answer

A) True 
 B)False

Question 18

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement.
-A major difference between bank credit cards and travel and entertainment credit cards is [the travel and entertainment | the bank] cards expect balances to be paid in full each month.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 19

Finance charges on two credit cards with the same stated APR

Accepted Answer

A)  will always be the same. 
B)  by federal law must be calculated the same way. 
C)  will be determined by the type of credit card used. 
D)  will be determined by the method used to calculate balances. 
E)  none of these. 
A)  will always be the same. 
B)  by federal law must be calculated the same way. 
C)  will be determined by the type of credit card used. 
D)  will be determined by the method used to calculate balances. 
E)  none of these.

Question 20

Saving is the preferred way to provide for financial emergencies.

Accepted Answer

A) True 
 B)False

Unsecured lines of credit are easy to use and often use some form of collateral as default protection.

An overdraft protection line of credit allows one to routinely bounce checks with little or no adverse consequences.

A credit applicant will be granted credit only after establishing a complete file at the local credit bureau.

The market value of your house is $175,000 and you have a first mortgage balance of $100,000.If a lender requires a 80% loan-to-market value ratio,how large could your home equity loan be?

Thirty-day or service credit accounts include utility bills,medical services,and credit card accounts.

The more credit cards one has,the better one's credit score.

Bank credit card cash advances will begin accruing interest charges immediately.

Credit report is routinely used to predict credit worthiness.

The proceeds of a home equity loan can be used for just about any purpose,and the interest paid is usually tax deductible.

The following are methods used to obtain personal information for identity theft except:

Federal law provides no protection for losses resulting from lost or stolen ____ cards.

For a person who sometimes pays his entire credit balance and sometimes pays the minimum payment,which calculation method would be the least expensive?

The ____ is really a second mortgage on your home.

____ are not a type of open account credit.

A credit limit refers to the maximum amount the cardholder can owe the issuer at any point in time.

Finance charges on two credit cards with the same stated APR

Saving is the preferred way to provide for financial emergencies.

Understanding the Financial Planning Process

Your Financial Statements and Plans

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 6: Using Credit

Unsecured lines of credit are easy to use and often use some form of collateral as default protection.

An overdraft protection line of credit allows one to routinely bounce checks with little or no adverse consequences.

A credit applicant will be granted credit only after establishing a complete file at the local credit bureau.

The market value of your house is $175,000 and you have a first mortgage balance of $100,000.If a lender requires a 80% loan-to-market value ratio,how large could your home equity loan be?

Thirty-day or service credit accounts include utility bills,medical services,and credit card accounts.

The more credit cards one has,the better one's credit score.

Bank credit card cash advances will begin accruing interest charges immediately.

Credit report is routinely used to predict credit worthiness.

The proceeds of a home equity loan can be used for just about any purpose,and the interest paid is usually tax deductible.

The following are methods used to obtain personal information for identity theft except:

Federal law provides no protection for losses resulting from lost or stolen ____ cards.

For a person who sometimes pays his entire credit balance and sometimes pays the minimum payment,which calculation method would be the least expensive?

The ____ is really a second mortgage on your home.

____ are not a type of open account credit.

A credit limit refers to the maximum amount the cardholder can owe the issuer at any point in time.

Finance charges on two credit cards with the same stated APR

Saving is the preferred way to provide for financial emergencies.

Understanding the Financial Planning Process

Your Financial Statements and Plans

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters