Question 1

Using credit is the ideal way to provide for financial emergencies.

Accepted Answer

A) True 
 B)False  False

Question 2

A person who pays off the total outstanding balance on his credit card monthly would prefer a credit card with:

Accepted Answer

A) a low required minimum payment percentage. 
B) a high interest rate. 
C) high over-the-limit fees. 
D) no grace period. 
E) no annual fee. 
A) a low required minimum payment percentage. 
B) a high interest rate. 
C) high over-the-limit fees. 
D) no grace period. 
E) no annual fee. E

Question 3

It is good to use credit for:

Accepted Answer

A) buying groceries. 
B) purchasing an expensive perfume. 
C) buying a car. 
D) visiting a tourist destination. 
E) buying an expensive dress. 
A) buying groceries. 
B) purchasing an expensive perfume. 
C) buying a car. 
D) visiting a tourist destination. 
E) buying an expensive dress. C

Question 4

A credit applicant is granted credit only after establishing a complete file at the local credit bureau.

Accepted Answer

A) True 
 B)False

Question 5

A person who pays off his credit balance every month should look for a credit card with a ____________. ​

Accepted Answer

A) long grace period 
B) high annual fee 
C) high interest rate 
D) specified method of calculating balance 
A) long grace period 
B) high annual fee 
C) high interest rate 
D) specified method of calculating balance

Question 6

_____ cards offer the cardholder a way to contribute to a worthy cause and are sometimes described as "credit cards with a cause."

Accepted Answer

A) Student 
B) Debit 
C) Credit 
D) Affinity 
E) Rebate 
A) Student 
B) Debit 
C) Credit 
D) Affinity 
E) Rebate

Question 7

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

Accepted Answer

A) Wise spending of credit 
B) FICO score reduced 
C) Easy loan approval 
D) Safety from identity theft 
E) Safety from bankruptcy 
A) Wise spending of credit 
B) FICO score reduced 
C) Easy loan approval 
D) Safety from identity theft 
E) Safety from bankruptcy

Question 8

A credit card user's credit rating will be hampered if he or she pays only the minimum monthly payment on a credit card.

Accepted Answer

A) True 
 B)False

Question 9

The key to creditworthiness is to maintain your debt safety ratio at 50 percent or above.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Families that have a steady source of income and a reasonable chance to repay debts would chooseChapter 13 rather thanChapter 7 of the U.S.Bankruptcy Code.

Accepted Answer

A) True 
 B)False

Question 12

Arranging for and fully repaying a small loan helps improve creditworthiness.

Accepted Answer

A) True 
 B)False

Question 13

Most of your debts would be totally discharged underChapter ____ of the federal bankruptcy law. ​

Accepted Answer

A) 7 
B) 13 
C) 12 
D) 9 
A) 7 
B) 13 
C) 12 
D) 9

Question 14

Nancy's take-home income is $3,000 per month,and she currently has a $700 monthly consumer debt.As per the general rules of thumb,____________. ​

Accepted Answer

A) Nancy cannot take on additional consumer debt as her debt safety ratio is higher than the general criteria 
B) Nancy can take on additional consumer debt as her debt safety ratio is higher than the general criteria 
C) Nancy can take on additional consumer debt as her debt safety ratio is lower than the general criteria 
D) Nancy cannot take on additional consumer debt as her debt safety ratio is lower than the general criteria 
A) Nancy cannot take on additional consumer debt as her debt safety ratio is higher than the general criteria 
B) Nancy can take on additional consumer debt as her debt safety ratio is higher than the general criteria 
C) Nancy can take on additional consumer debt as her debt safety ratio is lower than the general criteria 
D) Nancy cannot take on additional consumer debt as her debt safety ratio is lower than the general criteria

Question 15

Which of the following does a lender look at before granting credit to a borrower?

Accepted Answer

A) The political interests of the borrower 
B) The friend circle of the borrower 
C) The age of the borrower 
D) The religious affiliations of the borrower 
E) The lifestyle of the borrower 
A) The political interests of the borrower 
B) The friend circle of the borrower 
C) The age of the borrower 
D) The religious affiliations of the borrower 
E) The lifestyle of the borrower

Question 16

Clare's annual gross salary is $36,000,and her after-tax income is $28,800.What is Clare's maximum recommended monthly consumer credit payment?

Accepted Answer

A) $600 
B) $480 
C) $450 
D) $360 
E) $200 
A) $600 
B) $480 
C) $450 
D) $360 
E) $200

Question 17

Consumer credit has become a popular way of making routine purchases because:

Accepted Answer

A) individuals can restrict their spending. 
B) taking more credit will increase consumers' credit scores. 
C) the availability of different types of credit is abundant. 
D) consumer credit cannot be used for emergencies. 
E) no interest is charged when credit is used for large outlays. 
A) individuals can restrict their spending. 
B) taking more credit will increase consumers' credit scores. 
C) the availability of different types of credit is abundant. 
D) consumer credit cannot be used for emergencies. 
E) no interest is charged when credit is used for large outlays.

Question 18

Which of the following forms of consumer credit is the cheapest and offers tax shelters?

Accepted Answer

A) Overdraft protection lines 
B) Home equity credit lines 
C) Credit cards 
D) Unsecured personal credit 
E) The Wage Earner Plan 
A) Overdraft protection lines 
B) Home equity credit lines 
C) Credit cards 
D) Unsecured personal credit 
E) The Wage Earner Plan

Question 19

Joe and Jane have a tendency to build up large balances on their credit cards.Which of the following features would be least important to them?

Accepted Answer

A) No annual fee 
B) Low interest rates on balances 
C) A long grace period 
D) The method of calculating balances 
E) High reward points 
A) No annual fee 
B) Low interest rates on balances 
C) A long grace period 
D) The method of calculating balances 
E) High reward points

Question 20

_____ is a benefit of using credit cards.

Accepted Answer

A) Being able to increase disposable income 
B) Being able to provide payments for living beyond one's means 
C) Being able to make impulse purchases 
D) Greater affordability for a luxurious lifestyle 
E) Being able to meet a financial emergency 
A) Being able to increase disposable income 
B) Being able to provide payments for living beyond one's means 
C) Being able to make impulse purchases 
D) Greater affordability for a luxurious lifestyle 
E) Being able to meet a financial emergency

Using credit is the ideal way to provide for financial emergencies.

A person who pays off the total outstanding balance on his credit card monthly would prefer a credit card with:

It is good to use credit for:

A credit applicant is granted credit only after establishing a complete file at the local credit bureau.

A person who pays off his credit balance every month should look for a credit card with a ____________.

_____ cards offer the cardholder a way to contribute to a worthy cause and are sometimes described as "credit cards with a cause."

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

A credit card user's credit rating will be hampered if he or she pays only the minimum monthly payment on a credit card.

The key to creditworthiness is to maintain your debt safety ratio at 50 percent or above.

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.

Families that have a steady source of income and a reasonable chance to repay debts would chooseChapter 13 rather thanChapter 7 of the U.S.Bankruptcy Code.

Arranging for and fully repaying a small loan helps improve creditworthiness.

Most of your debts would be totally discharged underChapter ____ of the federal bankruptcy law.

Nancy's take-home income is $3,000 per month,and she currently has a $700 monthly consumer debt.As per the general rules of thumb,____________.

Which of the following does a lender look at before granting credit to a borrower?

Clare's annual gross salary is $36,000,and her after-tax income is $28,800.What is Clare's maximum recommended monthly consumer credit payment?

Consumer credit has become a popular way of making routine purchases because:

Which of the following forms of consumer credit is the cheapest and offers tax shelters?

Joe and Jane have a tendency to build up large balances on their credit cards.Which of the following features would be least important to them?

_____ is a benefit of using credit cards.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

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, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 6: Using Credit

Using credit is the ideal way to provide for financial emergencies.

A person who pays off the total outstanding balance on his credit card monthly would prefer a credit card with:

It is good to use credit for:

A credit applicant is granted credit only after establishing a complete file at the local credit bureau.

A person who pays off his credit balance every month should look for a credit card with a ____________. ​

_____ cards offer the cardholder a way to contribute to a worthy cause and are sometimes described as "credit cards with a cause."

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

A credit card user's credit rating will be hampered if he or she pays only the minimum monthly payment on a credit card.

The key to creditworthiness is to maintain your debt safety ratio at 50 percent or above.

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.

Families that have a steady source of income and a reasonable chance to repay debts would chooseChapter 13 rather thanChapter 7 of the U.S.Bankruptcy Code.

Arranging for and fully repaying a small loan helps improve creditworthiness.

Most of your debts would be totally discharged underChapter ____ of the federal bankruptcy law. ​

Nancy's take-home income is $3,000 per month,and she currently has a $700 monthly consumer debt.As per the general rules of thumb,____________. ​

Which of the following does a lender look at before granting credit to a borrower?

Clare's annual gross salary is $36,000,and her after-tax income is $28,800.What is Clare's maximum recommended monthly consumer credit payment?

Consumer credit has become a popular way of making routine purchases because:

Which of the following forms of consumer credit is the cheapest and offers tax shelters?

Joe and Jane have a tendency to build up large balances on their credit cards.Which of the following features would be least important to them?

_____ is a benefit of using credit cards.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

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, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

A person who pays off his credit balance every month should look for a credit card with a ____________.

Most of your debts would be totally discharged underChapter ____ of the federal bankruptcy law.

Nancy's take-home income is $3,000 per month,and she currently has a $700 monthly consumer debt.As per the general rules of thumb,____________.