Question 1

Only a Credit Repair company can remove inaccurate data from your credit report.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following apply to getting a cash advance with a credit card?

Accepted Answer

A)  Cash advances are available at ATM machines. 
B)  You begin paying interest immediately. 
C)  There may be a cash advance fee. 
D)  The interest rate may be higher than on regular purchases. 
E)  All of the above. 
A)  Cash advances are available at ATM machines. 
B)  You begin paying interest immediately. 
C)  There may be a cash advance fee. 
D)  The interest rate may be higher than on regular purchases. 
E)  All of the above.

Question 3

Ngoc likes to go shopping. Every time he goes to a new store, he fills out a credit card application for a store card so he can get a 15% discount on his purchases that day. Yesterday, he was trying to buy a new car but he was turned down for credit by the dealer. Ngoc can't understand why this happened since he thought he had pretty good credit. If you looked at his credit report, what most likely is the reason he was denied credit?

Accepted Answer

A)  He was turned over for collection on an old debt 9 years ago. 
B)  He has only worked for his current employer for nine months. 
C)  He has to many recent inquiries on his credit report. 
D)  There is not enough information available to answer this question. 
A)  He was turned over for collection on an old debt 9 years ago. 
B)  He has only worked for his current employer for nine months. 
C)  He has to many recent inquiries on his credit report. 
D)  There is not enough information available to answer this question.

Question 4

Susan has always maintained an excellent credit rating over the years. She has an annual income of $63,000, has lived at her current residence thirteen 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. Susan is very conservative and has all of her savings ($12,000) in a NOW account at her local bank. One of her credit cards has a balance of $550 and has an APR of 23%. Susan has been making monthly minimum payments on the credit card. Out of curiosity she would like to know how her credit card companies judge her creditworthiness and what she can do to improve her financial situation.
-Which one of the following items of evaluation would Susan score the highest on?

Accepted Answer

A)  employment history 
B)  annual income 
C)  length of residence 
D)  none of the above 
A)  employment history 
B)  annual income 
C)  length of residence 
D)  none of the above

Question 5

Monty currently has a Visa card from his bank with the following terms: 18% on purchases, 24% on cash advances with a 4% cash advance fee on the amount, and a default or penalty rate of 36%. His current statement shows a balance of $6,000. So far he has only taken one cash advance, withdrawing $1,000 from a casino in Las Vegas a year ago, which he has already paid off. Lately he has been having a hard time paying more than the minimum payment of 4% of his balance. The only assets he owns are a seven-year-old car and a $2,500 certificate of deposit that has a 5% APR.
-What will be Monty's minimum payment due?

Accepted Answer

A)  $90 
B)  $20 
C)  $240 
D)  $1,080 
E)  none of the above 
A)  $90 
B)  $20 
C)  $240 
D)  $1,080 
E)  none of the above

Question 6

Which of the following is not an advantage of credit cards?

Accepted Answer

A)  convenience or ease of shopping 
B)  emergency use 
C)  allows for online shopping 
D)  the finance charge that accrues on the account if not paid off in full each month 
E)  allows for consumption before the purchase is fully paid for 
A)  convenience or ease of shopping 
B)  emergency use 
C)  allows for online shopping 
D)  the finance charge that accrues on the account if not paid off in full each month 
E)  allows for consumption before the purchase is fully paid for

Question 7

List the five benefits or advantages associated with credit cards. What are the two major disadvantages?

Accepted Answer

Credit cards are convenient and easy to

Question 8

People with high credit card balances still need to invest money on a regular basis.

Accepted Answer

A) True 
 B)False

Question 9

When you withdraw cash from an ATM using your credit card

Accepted Answer

A)  You begin paying interest immediately. 
B)  You are not charged any interest until after the date the payment is due. 
C)  The interest fee is lower than that for purchases. 
D)  You're using a relatively inexpensive way to borrow money. 
A)  You begin paying interest immediately. 
B)  You are not charged any interest until after the date the payment is due. 
C)  The interest fee is lower than that for purchases. 
D)  You're using a relatively inexpensive way to borrow money.

Question 10

Credit purchases made for personal needs like home mortgages or car loans are referred to as revolving credit.

Accepted Answer

A) True 
 B)False

Question 11

Your credit score is possibly the most important number that affects your life. How does your credit score affect you?

Accepted Answer

Your credit score is used by potential c

Question 12

The highest FICO a consumer can achieve is ________.

Accepted Answer

A)  300 
B)  450 
C)  850 
D)  925 
E)  None of the above is correct. 
A)  300 
B)  450 
C)  850 
D)  925 
E)  None of the above is correct.

Question 13

Wally currently has a balance of $14,500 on his credit cards and he is having a hard time making the minimum payments on them. He has missed several payments and is now paying the default APR of 29.99%. He and his wife own a nice home with $40,000 in equity. They have $7,500 in a certificate of deposit with a 4% APR. He has come to you in tears asking for advice. What would you tell him to do?

Accepted Answer

A)  Seek out a non-profit credit counseling company. 
B)  Cash out his CD and pay down his credit cards. 
C)  Become a convenience user, and maintain just one credit card. 
D)  Take out a second equity loan on the house. 
E)  All of the above. 
A)  Seek out a non-profit credit counseling company. 
B)  Cash out his CD and pay down his credit cards. 
C)  Become a convenience user, and maintain just one credit card. 
D)  Take out a second equity loan on the house. 
E)  All of the above.

Question 14

Sometimes retailers will give you up to a 5% discount if you pay cash for their products instead of using your credit card. Why?

Accepted Answer

A)  It is just good customer service, especially for repeat customers. 
B)  They are getting close to their monthly charge limit and don't want to go over it. 
C)  They are saving on the Merchants Discount Fee so they pass the savings on to you. 
D)  Its much less paper work to process cash transactions. 
A)  It is just good customer service, especially for repeat customers. 
B)  They are getting close to their monthly charge limit and don't want to go over it. 
C)  They are saving on the Merchants Discount Fee so they pass the savings on to you. 
D)  Its much less paper work to process cash transactions.

Question 15

Monty currently has a Visa card from his bank with the following terms: 18% on purchases, 24% on cash advances with a 4% cash advance fee on the amount, and a default or penalty rate of 36%. His current statement shows a balance of $6,000. So far he has only taken one cash advance, withdrawing $1,000 from a casino in Las Vegas a year ago, which he has already paid off. Lately he has been having a hard time paying more than the minimum payment of 4% of his balance. The only assets he owns are a seven-year-old car and a $2,500 certificate of deposit that has a 5% APR.
-It is now three months later and Monty has missed two payments in a row and he is now paying the default or penalty rate on his balance. How much interest per month will Monty be accruing on his unpaid balance?

Accepted Answer

A)  18% 
B)  1.5% 
C)  36% 
D)  3% 
A)  18% 
B)  1.5% 
C)  36% 
D)  3%

Question 16

Which of the following is not a single-purpose credit card?

Accepted Answer

A)  Shell Oil 
B)  Bank of America Visa 
C)  Toys R Us 
D)  Sears 
E)  Macy's 
A)  Shell Oil 
B)  Bank of America Visa 
C)  Toys R Us 
D)  Sears 
E)  Macy's

Question 17

The average daily balance method calculates interest payments based on the ending balance of the previous period.

Accepted Answer

A) True 
 B)False

Question 18

One of the ugliest secrets about using your credit card for a cash advance is that ________.

Accepted Answer

A)  there is usually a 2% to 4% up front fee on the amount 
B)  the APR on the cash advance is typically higher than the APR for normal purchases 
C)  payments do not apply to cash advance balances unless the balance for regular credit purchases is zero. 
D)  all of the above apply to cash advances 
E)  all but B apply to cash advances 
A)  there is usually a 2% to 4% up front fee on the amount 
B)  the APR on the cash advance is typically higher than the APR for normal purchases 
C)  payments do not apply to cash advance balances unless the balance for regular credit purchases is zero. 
D)  all of the above apply to cash advances 
E)  all but B apply to cash advances

Question 19

Using your credit card for a cash advance in an emergency is probably a good idea. Using cash advances for non-emergencies is a terrible idea. Explain the characteristics that make cash advances very dangerous.

Accepted Answer

For starters, it shows that you are not

Question 20

Jerome has three major credit cards and makes payments on them each month. He has had one of them for six years, another for three years, and the last for eleven months. Making just the minimum payment has become automatic at this point, and Jerome barely even looks at the statements. Jerome is beginning to think that his approach to credit may be faulty, and he wants fo find out how to adjust it. He just applied for two additional credit cards.
-Jerome would be considered a

Accepted Answer

A)  credit user. 
B)  convenience user. 
C)  combination credit and convenience user. 
D)  T&E card user. 
E)  traditional charge account user. 
A)  credit user. 
B)  convenience user. 
C)  combination credit and convenience user. 
D)  T&E card user. 
E)  traditional charge account user.

Only a Credit Repair company can remove inaccurate data from your credit report.

Which of the following apply to getting a cash advance with a credit card?

Which of the following is not an advantage of credit cards?

List the five benefits or advantages associated with credit cards. What are the two major disadvantages?

People with high credit card balances still need to invest money on a regular basis.

When you withdraw cash from an ATM using your credit card

Credit purchases made for personal needs like home mortgages or car loans are referred to as revolving credit.

Your credit score is possibly the most important number that affects your life. How does your credit score affect you?

The highest FICO a consumer can achieve is ________.

Sometimes retailers will give you up to a 5% discount if you pay cash for their products instead of using your credit card. Why?

Which of the following is not a single-purpose credit card?

The average daily balance method calculates interest payments based on the ending balance of the previous period.

One of the ugliest secrets about using your credit card for a cash advance is that ________.

Using your credit card for a cash advance in an emergency is probably a good idea. Using cash advances for non-emergencies is a terrible idea. Explain the characteristics that make cash advances very dangerous.

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

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

Only a Credit Repair company can remove inaccurate data from your credit report.

Which of the following apply to getting a cash advance with a credit card?

Which of the following is not an advantage of credit cards?

List the five benefits or advantages associated with credit cards. What are the two major disadvantages?

People with high credit card balances still need to invest money on a regular basis.

When you withdraw cash from an ATM using your credit card

Credit purchases made for personal needs like home mortgages or car loans are referred to as revolving credit.

Your credit score is possibly the most important number that affects your life. How does your credit score affect you?

The highest FICO a consumer can achieve is ________.

Sometimes retailers will give you up to a 5% discount if you pay cash for their products instead of using your credit card. Why?

Which of the following is not a single-purpose credit card?

The average daily balance method calculates interest payments based on the ending balance of the previous period.

One of the ugliest secrets about using your credit card for a cash advance is that ________.

Using your credit card for a cash advance in an emergency is probably a good idea. Using cash advances for non-emergencies is a terrible idea. Explain the characteristics that make cash advances very dangerous.

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