Question 1

A company that gathers and sells consumers' financial history to creditors is a

Accepted Answer

A)  credit card company. 
B)  credit bureau. 
C)  credit investigation bureau. 
D)  credit recovery firm. 
E)  credit issuance firm. 
A)  credit card company. 
B)  credit bureau. 
C)  credit investigation bureau. 
D)  credit recovery firm. 
E)  credit issuance firm.

Question 2

Your credit score may affect how much you pay for Auto Insurance.

Accepted Answer

A) True 
 B)False

Question 3

The process of mathematically evaluating your creditworthiness to obtain credit is called

Accepted Answer

A)  credit scoring. 
B)  credit evaluation. 
C)  credit references. 
D)  credit history. 
E)  credit statistics. 
A)  credit scoring. 
B)  credit evaluation. 
C)  credit references. 
D)  credit history. 
E)  credit statistics.

Question 4

When you use a credit card at a store, the store is generally charged a fee ranging from 1.5% to 5%. What is this fee called?

Accepted Answer

A)  merchant discount fee 
B)  merchant back-end charge 
C)  merchant rate 
D)  discount rate 
E)  none of the above 
A)  merchant discount fee 
B)  merchant back-end charge 
C)  merchant rate 
D)  discount rate 
E)  none of the above

Question 5

To a credit user, the perks and benefits are the most important determinant when choosing a credit card.

Accepted Answer

A) True 
 B)False

Question 6

Compare and contrast the average, previous, and adjusted balance methods.

Accepted Answer

The average daily balance method calcula

Question 7

Which of the following is not a typical potential problem that can occur in a credit bureau file?

Accepted Answer

A)  You may be mixed up with someone else with a similar name. 
B)  Accounts may be listed as still open that are actually closed. 
C)  Accounts may be listed that you never had. 
D)  The wrong credit bureau handles your case. 
E)  A creditor may fail to report a payment or payments. 
A)  You may be mixed up with someone else with a similar name. 
B)  Accounts may be listed as still open that are actually closed. 
C)  Accounts may be listed that you never had. 
D)  The wrong credit bureau handles your case. 
E)  A creditor may fail to report a payment or payments.

Question 8

It is against the law for your potential employer to use your credit score for employment considerations.

Accepted Answer

A) True 
 B)False

Question 9

What rights would a college friend of yours have whose credit card application was denied?

Accepted Answer

A)  the right to view her credit report 
B)  the right to have the file be accurate 
C)  the right to point out errors in her file 
D)  the right to request mistakes in the file be corrected 
E)  All of the above are correct answers. 
A)  the right to view her credit report 
B)  the right to have the file be accurate 
C)  the right to point out errors in her file 
D)  the right to request mistakes in the file be corrected 
E)  All of the above are correct answers.

Question 10

Over 70% of the 25 biggest credit card issuers do not charge annual fees.

Accepted Answer

A) True 
 B)False

Question 11

How long do you have to begin an investigation into a billing problem under the Fair Credit Billing Act?

Accepted Answer

A)  15 days 
B)  20 days 
C)  30 days 
D)  60 days 
E)  none of the above 
A)  15 days 
B)  20 days 
C)  30 days 
D)  60 days 
E)  none of the above

Question 12

Your credit card was stolen, and you did not realize that it was stolen until you received your most recent billing statement. You contacted the credit card company immediately after you read your statement. Fraudulent charges were as follows: $500 for a VCR, $400 for a new set of tires, $100 cash withdrawal, and $25 in interest charges on the above items. You did not carry credit card insurance. How much is your potential maximum liability?

Accepted Answer

A)  $25.00 
B)  $50.00 
C)  $900.00 
D)  $1,000.00 
E)  $1,025.00 
A)  $25.00 
B)  $50.00 
C)  $900.00 
D)  $1,000.00 
E)  $1,025.00

Question 13

Getting a credit card while a college student is an excellent idea because

Accepted Answer

A)  it helps you learn about credit. 
B)  you can shop online and make reservations. 
C)  it works well for emergencies. 
D)  when used correctly it allows you to build up a solid credit history. 
E)  all of the above 
A)  it helps you learn about credit. 
B)  you can shop online and make reservations. 
C)  it works well for emergencies. 
D)  when used correctly it allows you to build up a solid credit history. 
E)  all of the above

Question 14

Angela noticed a list of creditors at the bottom of her credit report. Some of the inquiries were voluntary and some were involuntary. What is the difference between the two?

Accepted Answer

A)  Voluntary inquiries are due to your own credit requests; while involuntary inquiries are typically by creditors who seek to offer you a preapproved credit offer. 
B)  Involuntary inquiries are due to your own credit requests; while voluntary inquiries are typically by creditors who seek to offer you a preapproved credit offer. 
A)  Voluntary inquiries are due to your own credit requests; while involuntary inquiries are typically by creditors who seek to offer you a preapproved credit offer. 
B)  Involuntary inquiries are due to your own credit requests; while voluntary inquiries are typically by creditors who seek to offer you a preapproved credit offer.

Question 15

Research has determined that undergraduate college students tend to behave in similar manners with regards to their credit card usage. As noted in Chapter 6, which of the following behaviors are indicative of undergraduate students' credit card behaviors?

Accepted Answer

A)  Their parents frequently pay their credit card balances for them. 
B)  They make more than their minimum payment each month but still tend to carry a balance on their cards. 
C)  They pay off some of their cards in full each month and make minimum payments on other cards each month. 
D)  All of the above are typical behaviors exhibited by undergraduates with regards to their credit cards. 
A)  Their parents frequently pay their credit card balances for them. 
B)  They make more than their minimum payment each month but still tend to carry a balance on their cards. 
C)  They pay off some of their cards in full each month and make minimum payments on other cards each month. 
D)  All of the above are typical behaviors exhibited by undergraduates with regards to their credit cards.

Question 16

The choice of a credit card is a matter of personal credit card philosophy. If you are a credit user, the most important decision factor is the card's

Accepted Answer

A)  length of grace period. 
B)  annual fee. 
C)  APR on the unpaid balance. 
D)  minimum payment. 
E)  late payment fee. 
A)  length of grace period. 
B)  annual fee. 
C)  APR on the unpaid balance. 
D)  minimum payment. 
E)  late payment fee.

Question 17

The Truth In Lending Act requires that all consumer credit agreements disclose the ________ in bold print?

Accepted Answer

A)  Effective Annual Rate (EAR) 
B)  Annual Percentage Rate (APR) 
C)  Monthly Stated Rate (MSR) 
D)  Nominal Interest Rate (NIR) 
E)  none of the above 
A)  Effective Annual Rate (EAR) 
B)  Annual Percentage Rate (APR) 
C)  Monthly Stated Rate (MSR) 
D)  Nominal Interest Rate (NIR) 
E)  none of the above

Question 18

Roxanne has always maintained an excellent credit rating over the years. She has an annual income of $23,000, has lived at her current residence three years, and has worked at the same job for eight years. Susan works in a clerical position, has two credit cards and maintains two bank accounts. Which one of the following items of evaluation would Roxanne score the highest on?

Accepted Answer

A)  employment history 
B)  annual income 
C)  length of residence 
D)  All of the above are correct answers. 
A)  employment history 
B)  annual income 
C)  length of residence 
D)  All of the above are correct answers.

Question 19

Using your credit cards for cash advances is a relatively cheap way to borrow money because you usually do not start paying interest until the next billing period.

Accepted Answer

A) True 
 B)False

Question 20

Credit cards issued in conjunction with particular charities or organizations, like the Sierra Club or the Humane Society, that send a portion of their annual fee or percentage of their purchases back to the sponsoring organization are known as

Accepted Answer

A)  premium cards. 
B)  prestige cards. 
C)  affinity cards. 
D)  secured credit cards. 
E)  traditional charge accounts. 
A)  premium cards. 
B)  prestige cards. 
C)  affinity cards. 
D)  secured credit cards. 
E)  traditional charge accounts.

A company that gathers and sells consumers' financial history to creditors is a

Your credit score may affect how much you pay for Auto Insurance.

The process of mathematically evaluating your creditworthiness to obtain credit is called

When you use a credit card at a store, the store is generally charged a fee ranging from 1.5% to 5%. What is this fee called?

To a credit user, the perks and benefits are the most important determinant when choosing a credit card.

Compare and contrast the average, previous, and adjusted balance methods.

Which of the following is not a typical potential problem that can occur in a credit bureau file?

It is against the law for your potential employer to use your credit score for employment considerations.

What rights would a college friend of yours have whose credit card application was denied?

Over 70% of the 25 biggest credit card issuers do not charge annual fees.

How long do you have to begin an investigation into a billing problem under the Fair Credit Billing Act?

Getting a credit card while a college student is an excellent idea because

Angela noticed a list of creditors at the bottom of her credit report. Some of the inquiries were voluntary and some were involuntary. What is the difference between the two?

Research has determined that undergraduate college students tend to behave in similar manners with regards to their credit card usage. As noted in Chapter 6, which of the following behaviors are indicative of undergraduate students' credit card behaviors?

The choice of a credit card is a matter of personal credit card philosophy. If you are a credit user, the most important decision factor is the card's

The Truth In Lending Act requires that all consumer credit agreements disclose the ________ in bold print?

Using your credit cards for cash advances is a relatively cheap way to borrow money because you usually do not start paying interest until the next billing period.

Credit cards issued in conjunction with particular charities or organizations, like the Sierra Club or the Humane Society, that send a portion of their annual fee or percentage of their purchases back to the sponsoring organization are known as

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

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Exam 6: Using Credit Cards: The Role of Open Credit

A company that gathers and sells consumers' financial history to creditors is a

Your credit score may affect how much you pay for Auto Insurance.

The process of mathematically evaluating your creditworthiness to obtain credit is called

When you use a credit card at a store, the store is generally charged a fee ranging from 1.5% to 5%. What is this fee called?

To a credit user, the perks and benefits are the most important determinant when choosing a credit card.

Compare and contrast the average, previous, and adjusted balance methods.

Which of the following is not a typical potential problem that can occur in a credit bureau file?

It is against the law for your potential employer to use your credit score for employment considerations.

What rights would a college friend of yours have whose credit card application was denied?

Over 70% of the 25 biggest credit card issuers do not charge annual fees.

How long do you have to begin an investigation into a billing problem under the Fair Credit Billing Act?

Getting a credit card while a college student is an excellent idea because

Angela noticed a list of creditors at the bottom of her credit report. Some of the inquiries were voluntary and some were involuntary. What is the difference between the two?

Research has determined that undergraduate college students tend to behave in similar manners with regards to their credit card usage. As noted in Chapter 6, which of the following behaviors are indicative of undergraduate students' credit card behaviors?

The choice of a credit card is a matter of personal credit card philosophy. If you are a credit user, the most important decision factor is the card's

The Truth In Lending Act requires that all consumer credit agreements disclose the ________ in bold print?

Using your credit cards for cash advances is a relatively cheap way to borrow money because you usually do not start paying interest until the next billing period.

Credit cards issued in conjunction with particular charities or organizations, like the Sierra Club or the Humane Society, that send a portion of their annual fee or percentage of their purchases back to the sponsoring organization are known as

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters