Question 1

What is the number one reason why consumers default on their debts?

Accepted Answer

A)  Medical expenses 
B)  Defective goods and services 
C)  Excessive use of credit 
D)  Fraudulent use of credit 
E)  Consumer fraud 
A)  Medical expenses 
B)  Defective goods and services 
C)  Excessive use of credit 
D)  Fraudulent use of credit 
E)  Consumer fraud

Question 2

If Marjorie Wilcox borrows $200 for one year with an APR of 12% and an annual service fee of $10, what is her total cost of credit?

Accepted Answer

A)  $10 
B)  $12 
C)  $24 
D)  $34 
E)  $42 
A)  $10 
B)  $12 
C)  $24 
D)  $34 
E)  $42

Question 3

There is never a charge for any service provided by a Consumer Credit Counseling Service office.

Accepted Answer

A) True 
 B)False

Question 4

You just received your credit card statement. Which of the following are included on that statement?

Accepted Answer

A)  Annual fee 
B)  Annual percentage rate for purchases 
C)  Penalty fees 
D)  Method used to calculate balance 
E)  All of these 
A)  Annual fee 
B)  Annual percentage rate for purchases 
C)  Penalty fees 
D)  Method used to calculate balance 
E)  All of these

Question 5

Credit life insurance provides for the repayment of the insured loan if the borrower dies.

Accepted Answer

A) True 
 B)False

Question 6

CCCS counseling is:

Accepted Answer

A)  quite costly. 
B)  usually free. 
C)  often useless. 
D)  fraught with red tape. 
E)  available only if you declare bankruptcy. 
A)  quite costly. 
B)  usually free. 
C)  often useless. 
D)  fraught with red tape. 
E)  available only if you declare bankruptcy.

Question 7

The least expensive loans are available from finance companies and retailers.

Accepted Answer

A) True 
 B)False

Question 8

Randy Ice starts the month with a balance on his credit card of $1000. On the 10th day of the month, he purchases $200 in clothes with his credit card. On the 15th day of the month he makes a payment on his credit card of $500. The average daily balance for the month including the new purchase is $883. The average daily balance for the month excluding the new purchase is $750. The bank charges 1.5 percent per month and uses the average daily balance excluding new purchases method. What would Randy's finance charges be for the month?

Accepted Answer

A)  $7.50 
B)  $13.25 
C)  $11.25 
D)  $15.00 
E)  $18.00 
A)  $7.50 
B)  $13.25 
C)  $11.25 
D)  $15.00 
E)  $18.00

Question 9

A person filing for relief under the bankruptcy code is called a bankrupt, not a debtor.

Accepted Answer

A) True 
 B)False

Question 10

You can deduct interest paid on consumer loans for state and federal income tax returns.

Accepted Answer

A) True 
 B)False

Question 11

Which type of credit insurance repays your debt in the event of a loss of income due to illness or injury?

Accepted Answer

A)  Credit life insurance 
B)  Credit accident and health insurance 
C)  Credit property insurance 
D)  Credit casualty insurance 
E)  Credit disability insurance 
A)  Credit life insurance 
B)  Credit accident and health insurance 
C)  Credit property insurance 
D)  Credit casualty insurance 
E)  Credit disability insurance

Question 12

The annual percentage rate is the percentage cost of credit on a yearly basis.

Accepted Answer

A) True 
 B)False

Question 13

If creditors add finance charges after subtracting payments made during the billing period, this is called the previous balance method.

Accepted Answer

A) True 
 B)False

Question 14

Which form of bankruptcy allows a debtor with a regular income to extinguish his or her debts from future earnings or other property over a period of time?

Accepted Answer

A)  Chapter 7 
B)  Chapter 11 
C)  Chapter 13 
D)  Chapter 15 
E)  Chapter 17 
A)  Chapter 7 
B)  Chapter 11 
C)  Chapter 13 
D)  Chapter 15 
E)  Chapter 17

Question 15

The most basic method of calculating interest is the compound interest calculation.

Accepted Answer

A) True 
 B)False

Question 16

In a Chapter 7 bankruptcy, a person filing for relief is called a:

Accepted Answer

A)  bankrupt. 
B)  debtor. 
C)  dependent. 
D)  criminal. 
E)  creditor. 
A)  bankrupt. 
B)  debtor. 
C)  dependent. 
D)  criminal. 
E)  creditor.

Question 17

Membership in credit unions has been:

Accepted Answer

A)  growing steadily. 
B)  declining gradually. 
C)  static. 
D)  restricted by the Tax Reform Act of 1986. 
E)  restricted by state laws. 
A)  growing steadily. 
B)  declining gradually. 
C)  static. 
D)  restricted by the Tax Reform Act of 1986. 
E)  restricted by state laws.

Question 18

If creditors give you no credit for payments made during the billing period, this is called the:

Accepted Answer

A)  APR method. 
B)  discount method. 
C)  previous balance method. 
D)  adjusted balance method. 
E)  average daily balance method. 
A)  APR method. 
B)  discount method. 
C)  previous balance method. 
D)  adjusted balance method. 
E)  average daily balance method.

Question 19

Payday, cash advance, check advance, and post-dated checks are _________ loans.

Accepted Answer

A)  inexpensive 
B)  medium-priced 
C)  expensive 
D)  low APR 
E)  variable APR 
A)  inexpensive 
B)  medium-priced 
C)  expensive 
D)  low APR 
E)  variable APR

Question 20

If you default on your automobile loan:

Accepted Answer

A)  an advance notice to you is required before your car is repossessed. 
B)  no advance notice is required before repossession. 
C)  the federal consumer credit laws give you protection from your car being repossessed. 
D)  you don't have to pay the full balance due on your automobile loan. 
E)  you pay fifty percent of the balance due on your automobile loan. 
A)  an advance notice to you is required before your car is repossessed. 
B)  no advance notice is required before repossession. 
C)  the federal consumer credit laws give you protection from your car being repossessed. 
D)  you don't have to pay the full balance due on your automobile loan. 
E)  you pay fifty percent of the balance due on your automobile loan.

What is the number one reason why consumers default on their debts?

If Marjorie Wilcox borrows $200 for one year with an APR of 12% and an annual service fee of $10, what is her total cost of credit?

There is never a charge for any service provided by a Consumer Credit Counseling Service office.

You just received your credit card statement. Which of the following are included on that statement?

Credit life insurance provides for the repayment of the insured loan if the borrower dies.

CCCS counseling is:

The least expensive loans are available from finance companies and retailers.

A person filing for relief under the bankruptcy code is called a bankrupt, not a debtor.

You can deduct interest paid on consumer loans for state and federal income tax returns.

Which type of credit insurance repays your debt in the event of a loss of income due to illness or injury?

The annual percentage rate is the percentage cost of credit on a yearly basis.

If creditors add finance charges after subtracting payments made during the billing period, this is called the previous balance method.

Which form of bankruptcy allows a debtor with a regular income to extinguish his or her debts from future earnings or other property over a period of time?

The most basic method of calculating interest is the compound interest calculation.

In a Chapter 7 bankruptcy, a person filing for relief is called a:

Membership in credit unions has been:

If creditors give you no credit for payments made during the billing period, this is called the:

Payday, cash advance, check advance, and post-dated checks are _________ loans.

If you default on your automobile loan:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters

Exam 7: Choosing a Source of Credit: The Costs of Credit Alternatives

What is the number one reason why consumers default on their debts?

If Marjorie Wilcox borrows $200 for one year with an APR of 12% and an annual service fee of $10, what is her total cost of credit?

There is never a charge for any service provided by a Consumer Credit Counseling Service office.

You just received your credit card statement. Which of the following are included on that statement?

Credit life insurance provides for the repayment of the insured loan if the borrower dies.

CCCS counseling is:

The least expensive loans are available from finance companies and retailers.

A person filing for relief under the bankruptcy code is called a bankrupt, not a debtor.

You can deduct interest paid on consumer loans for state and federal income tax returns.

Which type of credit insurance repays your debt in the event of a loss of income due to illness or injury?

The annual percentage rate is the percentage cost of credit on a yearly basis.

If creditors add finance charges after subtracting payments made during the billing period, this is called the previous balance method.

Which form of bankruptcy allows a debtor with a regular income to extinguish his or her debts from future earnings or other property over a period of time?

The most basic method of calculating interest is the compound interest calculation.

In a Chapter 7 bankruptcy, a person filing for relief is called a:

Membership in credit unions has been:

If creditors give you no credit for payments made during the billing period, this is called the:

Payday, cash advance, check advance, and post-dated checks are _________ loans.

If you default on your automobile loan:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters