Question 1

____ is a benefit of borrowing.

Accepted Answer

A)  The ability to buy expensive goods while spreading the payments over time 
B)  Providing payments that fit into a budget 
C)  Having a permanent record of transactions 
D)  Being able to purchase goods and services when checks are not acceptable 
E)  All of these are benefits. 
A)  The ability to buy expensive goods while spreading the payments over time 
B)  Providing payments that fit into a budget 
C)  Having a permanent record of transactions 
D)  Being able to purchase goods and services when checks are not acceptable 
E)  All of these are benefits.

Question 2

All of the following are useful ways to build a strong credit rating except

Accepted Answer

A)  Open checking and savings accounts. 
B)  Open and use a charge account. 
C)  Apply for a long-term loan and occasionally be late with a payment. 
D)  Make payments on time. 
E)  Talk with the lender if you foresee difficulty in making a payment. 
A)  Open checking and savings accounts. 
B)  Open and use a charge account. 
C)  Apply for a long-term loan and occasionally be late with a payment. 
D)  Make payments on time. 
E)  Talk with the lender if you foresee difficulty in making a payment.

Question 3

It is recommended that you never give your credit card account number out over the phone.

Accepted Answer

A) True 
 B)False

Question 4

The intent of a Wage Earner Plan is to eliminate most of the debtor's obligations.

Accepted Answer

A) True 
 B)False

Question 5

When canceling a credit card,you should cut up the card and ____ that you are canceling your account.

Accepted Answer

A)  inform the issuer in writing 
B)  call the issuer and tell them 
C)  inform the credit bureau in writing 
D)  call the credit bureau and tell them 
E)  all of the above 
A)  inform the issuer in writing 
B)  call the issuer and tell them 
C)  inform the credit bureau in writing 
D)  call the credit bureau and tell them 
E)  all of the above

Question 6

Thirty-day or regular charge accounts require the customers to pay off the debt 10 to 20 days after the billing date with no interest expense.

Accepted Answer

A) True 
 B)False

Question 7

The purpose of a credit report is to evaluate the kind of risk you pose to the lender.

Accepted Answer

A) True 
 B)False

Question 8

Rebate credit cards work best for those who use the rebates,charge a lot,and do not carry high monthly balances.

Accepted Answer

A) True 
 B)False

Question 9

For someone with a good credit rating,lenders will typically lend up to 100% of equity in a home using a home equity credit line.

Accepted Answer

A) True 
 B)False

Question 10

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.
-Nancy's take-home income is $3,000 per month,and she currently has $700 monthly consumer debt.According to the general rules of thumb,Nancy [is | is not] in a position to take on additional consumer debt.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 11

The quality of your credit rating is maintained by

Accepted Answer

A)  only using cash to make purchases. 
B)  making credit payments early. 
C)  seldom questioning billing errors. 
D)  using multiple credit cards. 
E)  meeting credit obligations as contracts require. 
A)  only using cash to make purchases. 
B)  making credit payments early. 
C)  seldom questioning billing errors. 
D)  using multiple credit cards. 
E)  meeting credit obligations as contracts require.

Question 12

Personal insolvency can be legally satisfied by

Accepted Answer

A)  Chapter 13 bankruptcy. 
B)  relinquishing all credit cards. 
C)  Chapter 7 bankruptcy. 
D)  b and c above. 
E)  a and c above. 
A)  Chapter 13 bankruptcy. 
B)  relinquishing all credit cards. 
C)  Chapter 7 bankruptcy. 
D)  b and c above. 
E)  a and c above.

Question 13

Anna uses her credit card regularly,but she pays the total balance monthly.Anna should look for a credit account with

Accepted Answer

A)  no annual fee. 
B)  low interest rates. 
C)  long grace period. 
D)  a and b. 
E)  a and c. 
A)  no annual fee. 
B)  low interest rates. 
C)  long grace period. 
D)  a and b. 
E)  a and c.

Question 14

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 15

Lindsey has a job with monthly take-home pay of $3,500.Using the suggested maximum debt safety ratio,what maximum debt burden per month can she assume? (Show all work.)

Accepted Answer

The maximum debt safety ratio

Question 16

Credit cards with very low minimum balance requirements are in the consumer's best interest.

Accepted Answer

A) True 
 B)False

Question 17

With open account credit,one can often avoid interest charges if

Accepted Answer

A)  the account balance is paid in full every month. 
B)  at least half the account balance is paid every month. 
C)  the minimum payment is made every month. 
D)  the account is a revolving credit account. 
E)  the balance is below the credit limit. 
A)  the account balance is paid in full every month. 
B)  at least half the account balance is paid every month. 
C)  the minimum payment is made every month. 
D)  the account is a revolving credit account. 
E)  the balance is below the credit limit.

Question 18

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 19

Your credit limit is determined by a number of factors,such as financial position,earning power,etc.

Accepted Answer

A) True 
 B)False

Question 20

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.
-In the year after the Credit Card Act of 2009 was passed,there was a(n)[increase | decrease] in defaults.

Accepted Answer

The answer of Choose the word or phrase in [...

____ is a benefit of borrowing.

All of the following are useful ways to build a strong credit rating except

It is recommended that you never give your credit card account number out over the phone.

The intent of a Wage Earner Plan is to eliminate most of the debtor's obligations.

When canceling a credit card,you should cut up the card and ____ that you are canceling your account.

Thirty-day or regular charge accounts require the customers to pay off the debt 10 to 20 days after the billing date with no interest expense.

The purpose of a credit report is to evaluate the kind of risk you pose to the lender.

Rebate credit cards work best for those who use the rebates,charge a lot,and do not carry high monthly balances.

For someone with a good credit rating,lenders will typically lend up to 100% of equity in a home using a home equity credit line.

The quality of your credit rating is maintained by

Personal insolvency can be legally satisfied by

Anna uses her credit card regularly,but she pays the total balance monthly.Anna should look for a credit account with

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

Lindsey has a job with monthly take-home pay of $3,500.Using the suggested maximum debt safety ratio,what maximum debt burden per month can she assume? (Show all work.)

Credit cards with very low minimum balance requirements are in the consumer's best interest.

With open account credit,one can often avoid interest charges if

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

Your credit limit is determined by a number of factors,such as financial position,earning power,etc.

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. -In the year after the Credit Card Act of 2009 was passed,there was a(n)[increase | decrease] in defaults.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

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

____ is a benefit of borrowing.

All of the following are useful ways to build a strong credit rating except

It is recommended that you never give your credit card account number out over the phone.

The intent of a Wage Earner Plan is to eliminate most of the debtor's obligations.

When canceling a credit card,you should cut up the card and ____ that you are canceling your account.

Thirty-day or regular charge accounts require the customers to pay off the debt 10 to 20 days after the billing date with no interest expense.

The purpose of a credit report is to evaluate the kind of risk you pose to the lender.

Rebate credit cards work best for those who use the rebates,charge a lot,and do not carry high monthly balances.

For someone with a good credit rating,lenders will typically lend up to 100% of equity in a home using a home equity credit line.

The quality of your credit rating is maintained by

Personal insolvency can be legally satisfied by

Anna uses her credit card regularly,but she pays the total balance monthly.Anna should look for a credit account with

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

Lindsey has a job with monthly take-home pay of $3,500.Using the suggested maximum debt safety ratio,what maximum debt burden per month can she assume? (Show all work.)

Credit cards with very low minimum balance requirements are in the consumer's best interest.

With open account credit,one can often avoid interest charges if

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

Your credit limit is determined by a number of factors,such as financial position,earning power,etc.

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. -In the year after the Credit Card Act of 2009 was passed,there was a(n)[increase | decrease] in defaults.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

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