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

Your bankcard has an APR of 18% and there is a 2% fee for cash advances. The bank starts charging interest on cash advances immediately. You get a cash advance of $600 on the first day of the month. You get your credit card bill at the end of the month. What is the total finance charge you will pay on this cash advance for the month? Assume each month has 30 days.

The Consumer Credit Counseling Service (CCCS) is affiliated with the:

An increasing number of bankruptcy filers are well-educated, middle-class baby boomers.

In a Chapter 7 bankruptcy, the debtor:

The average U.S. household has ______ credit cards.

With the add-on interest method, interest is calculated on the full amount of the original principal.

In open-end credit, what are the various systems creditors use to calculate the balance on which they assess finance charges?

Explain simple interest.

The consumer credit laws require that an advance notice be given before repossessing a car.

If you declare a Chapter 7 bankruptcy, you do not have to pay alimony, child support, or educational loans.

"Keeping up with the Joneses" is one of the reasons for indebtedness.

You can often obtain medium-priced loans from commercial banks and credit unions.

The Rule of 78s demonstrates that a borrower pays:

According to Fair Isaac Corporation (FICO), a personal bankruptcy can cause an immediate drop in your credit score of how many points?

If you receive a phone call from a debt collector:

Sandra Jennings gets a loan from General Motors Acceptance Corporation. Which type of lending institution is this?

Which one of the following is a local organization that provides debt counseling services for families and individuals?

You have the right to file your own bankruptcy case and represent yourself at all court hearings.

If you borrow $100 at 10 percent simple annual interest and repay it in one lump-sum at the end of one year, you will repay:

Under the rule of 78s, loans for a year or less usually do not allow for a finance charge rebate.