Exam 6: Using Credit

The market value of your house is $175,000,and you have a first mortgage balance of $100,000.If a lender requires an 80% loan-to-market value ratio,how large could your home equity loan be?

Mike has a MasterCard with an annual fee of $25,an 18% interest,and a $1,000 credit limit.He always pays the total outstanding balance monthly.His most recent monthly statement lists the previous month's payment,new charges in the current month totaling $1,500,and a $30 fee.The fee is most likely the result of:

A proper use of open account credit would be to buy ____________. ​

The most common method of computing finance charges on a credit card is the average daily balance method including new purchases.

Which of the following modes of identity theft involves thieves obtaining your personal information from financial institutions and other sources under false pretenses?

Finance charges are computed only on the unpaid balance from previous months' purchases.

A payment made using _____ is equivalent to paying by cash.

Ted and Karen have a combined take-home income of $4,500.Their total monthly payments on consumer debt is $875.What is their debt safety ratio? Are they exhibiting any signs of approaching credit problems?

Which of the following statements is true about the cash advances that the holder of a bank credit card can obtain from participating banks?

____________ involves some type of debt restructuring by establishing a debt repayment schedule. ​

Which of the following cards is issued as a form of credit by department stores and oil companies?

You are likely to have financial difficulties if your personal credit obligations exceed ____________ of your take-home pay. ​

Debit cards are very convenient to use as they work like writing a check.

Persons with very poor credit ratings can still get _____ credit cards.

All credit cards have annual fees.

One should not use credit to purchase food,clothing,and other nondurables,even if it is only for convenience and the balance will be completely paid upon billing.

Which of the following is a preferred use of a credit card?

Straight bankruptcy is allowed under ____________ of the bankruptcy code. ​

If a borrower has a high credit score,then there is ____________. ​

You have a $926 balance on your credit card account.The minimum payment on your account is 2 percent of the latest balance or $20,whichever is greater.What will be the minimum payment this month?