Question 1

Debit cards work like writing a check.

Accepted Answer

A) True 
 B)False

Question 2

Retail charge cards are advantageous to merchants because:

Accepted Answer

A)  they help the merchants get loans. 
B)  they help build consumer loyalty. 
C)  they help the merchants file for bankruptcy. 
D)  they help the merchants save taxes. 
E)  they help the merchants give loans to their suppliers. 
A)  they help the merchants get loans. 
B)  they help build consumer loyalty. 
C)  they help the merchants file for bankruptcy. 
D)  they help the merchants save taxes. 
E)  they help the merchants give loans to their suppliers.

Question 3

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 big disadvantage of a debit card is that it [ typically has high annual fees | doesn't provide a line of credit ].

Accepted Answer

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

Question 4

Lenders' guidelines say that you are likely to have financial difficulties if your personal credit obligations exceed _____ of your take-home pay.

Accepted Answer

A)  15% 
B)  20% 
C)  10% 
D)  3% 
E)  25% 
A)  15% 
B)  20% 
C)  10% 
D)  3% 
E)  25%

Question 5

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. 
Student credit cards usually [ do | do not ] require parental or guardian guarantees.

Accepted Answer

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

Question 6

Nancy's take-home income is $3,000 per month, and she currently has a $700 monthly consumer debt. Which of the following statements applies to Nancy's ability to handle additional debt?

Accepted Answer

A)  Nancy cannot take on additional consumer debt because her debt safety ratio is higher than lenders' guidelines. 
B)  Nancy can take on additional consumer debt because her debt safety ratio is higher than lenders' guidelines. 
C)  Nancy cannot take on additional consumer debt because her debt safety ratio is lower than lenders' guidelines. 
D)  Nancy can take on additional consumer debt because her debt safety ratio is lower than experts' guidelines. 
E)  Nancy cannot take on additional consumer debt because her debt safety ratio is lower than experts' guidelines. 
A)  Nancy cannot take on additional consumer debt because her debt safety ratio is higher than lenders' guidelines. 
B)  Nancy can take on additional consumer debt because her debt safety ratio is higher than lenders' guidelines. 
C)  Nancy cannot take on additional consumer debt because her debt safety ratio is lower than lenders' guidelines. 
D)  Nancy can take on additional consumer debt because her debt safety ratio is lower than experts' guidelines. 
E)  Nancy cannot take on additional consumer debt because her debt safety ratio is lower than experts' guidelines.

Question 7

Which of the following is usually excluded from a monthly credit card statement?

Accepted Answer

A)  The minimum payment 
B)  The payment due date 
C)  The type of goods purchased 
D)  The account activity during the current period 
E)  The interest rate 
A)  The minimum payment 
B)  The payment due date 
C)  The type of goods purchased 
D)  The account activity during the current period 
E)  The interest rate

Question 8

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. 
If your total monthly consumer credit payments are $925, and your monthly take-home pay is $2,700, your debt safety ratio is [ 34% | 14% ].

Accepted Answer

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

Question 9

A smaller bank is more likely than a larger bank to charge an annual fee for its credit cards.

Accepted Answer

A) True 
 B)False

Question 10

_____ are targeted at people with bad credit histories.

Accepted Answer

A)  Secured credit cards 
B)  Retail charge cards 
C)  Affinity cards 
D)  Prepaid cards 
E)  Unsecured personal credit lines 
A)  Secured credit cards 
B)  Retail charge cards 
C)  Affinity cards 
D)  Prepaid cards 
E)  Unsecured personal credit lines

Question 11

If you initiated the telephone call, it is okay to give your credit card account number when ordering or purchasing from major catalog houses, airlines, hotels, and so on.

Accepted Answer

A) True 
 B)False

Question 12

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. 
Using [ credit | savings ] to handle financial emergencies is the recommended choice.

Accepted Answer

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

Question 13

Credit reports on individual borrowers are provided by credit card issuers.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a possible result of excess unused credit capacity?

Accepted Answer

A)  Additional interest charges 
B)  FICO score increase 
C)  Increased difficulty of loan approval 
D)  Longer credit card introductory period 
E)  Increased threat of credit card fraud 
A)  Additional interest charges 
B)  FICO score increase 
C)  Increased difficulty of loan approval 
D)  Longer credit card introductory period 
E)  Increased threat of credit card fraud

Question 15

Credit should not be consistently used for purchasing nondurable goods.

Accepted Answer

A) True 
 B)False

Question 16

A(n) _____ is a type of reporting agency that collects and sells credit information about individual borrowers.

Accepted Answer

A)  credit bureau 
B)  consumer bureau 
C)  insurance company 
D)  bank 
E)  credit scoring house 
A)  credit bureau 
B)  consumer bureau 
C)  insurance company 
D)  bank 
E)  credit scoring house

Question 17

Lenders use the guideline that a borrower's monthly repayment burden should not be more than 20% of the borrower's take-home pay.

Accepted Answer

A) True 
 B)False

Question 18

Ted and Karen have a combined take-home pay of $4,500. Their total monthly payment on consumer debt is $875. What is their debt safety ratio? Are they exhibiting any signs of approaching credit problems?

Accepted Answer

Ted and Karen's debt safety ratio is 19.

Question 19

With a bank credit card, you 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 account 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 account balance is below the credit limit.

Question 20

A credit card application requests information that is routinely used to predict creditworthiness.

Accepted Answer

A) True 
 B)False

Debit cards work like writing a check.

Retail charge cards are advantageous to merchants because:

Lenders' guidelines say that you are likely to have financial difficulties if your personal credit obligations exceed _____ of your take-home pay.

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. Student credit cards usually [ do | do not ] require parental or guardian guarantees.

Nancy's take-home income is $3,000 per month, and she currently has a $700 monthly consumer debt. Which of the following statements applies to Nancy's ability to handle additional debt?

Which of the following is usually excluded from a monthly credit card statement?

A smaller bank is more likely than a larger bank to charge an annual fee for its credit cards.

_____ are targeted at people with bad credit histories.

If you initiated the telephone call, it is okay to give your credit card account number when ordering or purchasing from major catalog houses, airlines, hotels, and so on.

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. Using [ credit | savings ] to handle financial emergencies is the recommended choice.

Credit reports on individual borrowers are provided by credit card issuers.

Which of the following is a possible result of excess unused credit capacity?

Credit should not be consistently used for purchasing nondurable goods.

A(n) _____ is a type of reporting agency that collects and sells credit information about individual borrowers.

Lenders use the guideline that a borrower's monthly repayment burden should not be more than 20% of the borrower's take-home pay.

Ted and Karen have a combined take-home pay of $4,500. Their total monthly payment on consumer debt is $875. What is their debt safety ratio? Are they exhibiting any signs of approaching credit problems?

With a bank credit card, you can often avoid interest charges if:

A credit card application requests information that is routinely used to predict creditworthiness.

Understanding the Financial Planning Process

Developing 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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 6: Using Credit

Debit cards work like writing a check.

Retail charge cards are advantageous to merchants because:

Lenders' guidelines say that you are likely to have financial difficulties if your personal credit obligations exceed _____ of your take-home pay.

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. Student credit cards usually [ do | do not ] require parental or guardian guarantees.

Nancy's take-home income is $3,000 per month, and she currently has a $700 monthly consumer debt. Which of the following statements applies to Nancy's ability to handle additional debt?

Which of the following is usually excluded from a monthly credit card statement?

A smaller bank is more likely than a larger bank to charge an annual fee for its credit cards.

_____ are targeted at people with bad credit histories.

If you initiated the telephone call, it is okay to give your credit card account number when ordering or purchasing from major catalog houses, airlines, hotels, and so on.

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. Using [ credit | savings ] to handle financial emergencies is the recommended choice.

Credit reports on individual borrowers are provided by credit card issuers.

Which of the following is a possible result of excess unused credit capacity?

Credit should not be consistently used for purchasing nondurable goods.

A(n) _____ is a type of reporting agency that collects and sells credit information about individual borrowers.

Lenders use the guideline that a borrower's monthly repayment burden should not be more than 20% of the borrower's take-home pay.

Ted and Karen have a combined take-home pay of $4,500. Their total monthly payment on consumer debt is $875. What is their debt safety ratio? Are they exhibiting any signs of approaching credit problems?

With a bank credit card, you can often avoid interest charges if:

A credit card application requests information that is routinely used to predict creditworthiness.

Understanding the Financial Planning Process

Developing 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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters