Question 1

A cash advance

Accepted Answer

A)  Involves a grace perod on most cards 
B)  Is less expensive than charging a purchase to your credit card 
C)  On some cards has a lower interest rate than on purchases 
D)  Requires you to pay interest every day until you repay the cash advance 
E)  Is a loan billed to your bank account. 
A)  Involves a grace perod on most cards 
B)  Is less expensive than charging a purchase to your credit card 
C)  On some cards has a lower interest rate than on purchases 
D)  Requires you to pay interest every day until you repay the cash advance 
E)  Is a loan billed to your bank account.

Question 2

Which of the following is NOT a valid reason for borrowing?

Accepted Answer

A)  Borrowing for a college education. 
B)  Paying for everyday living expenses. 
C)  Buying a car so a homemaker can return to work. 
D)  Paying for a medical emergency. 
E)  All of these are valid reasons for borrowing. 
A)  Borrowing for a college education. 
B)  Paying for everyday living expenses. 
C)  Buying a car so a homemaker can return to work. 
D)  Paying for a medical emergency. 
E)  All of these are valid reasons for borrowing.

Question 3

A credit card holder who pays the full balance during the grace period each month is actually getting a free loan from the credit card company.

Accepted Answer

A) True 
 B)False

Question 4

A loan officer is examining whether or not to offer you a loan today. Specifically, she is examining your income and debts. Which of the five Cs of credit is the loan officer reviewing?

Accepted Answer

A)  Character 
B)  Capacity 
C)  Capital 
D)  Collateral 
E)  Conditions 
A)  Character 
B)  Capacity 
C)  Capital 
D)  Collateral 
E)  Conditions

Question 5

During the grace period, finance charges are assessed at only half the normal rate.

Accepted Answer

A) True 
 B)False

Question 6

A loan that must be repaid in total on a specified day, usually within 30 to 90 days, is

Accepted Answer

A)  A credit card. 
B)  An installment cash credit. 
C)  A bank line of credit. 
D)  Open-end credit. 
E)  Single lump-sum credit. 
A)  A credit card. 
B)  An installment cash credit. 
C)  A bank line of credit. 
D)  Open-end credit. 
E)  Single lump-sum credit.

Question 7

A secured credit card is most appropriate for someone with a strong credit history .

Accepted Answer

A) True 
 B)False

Question 8

The question "Will you repay the loan?" relates to

Accepted Answer

A)  Character. 
B)  Capacity. 
C)  Capital. 
D)  Collateral. 
E)  Conditions. 
A)  Character. 
B)  Capacity. 
C)  Capital. 
D)  Collateral. 
E)  Conditions.

Question 9

All of the following are consumer credit protection laws except

Accepted Answer

A)  The Truth in Lending and Consumer Leasing Acts 
B)  The Equal Credit Opportunity Act 
C)  The Fair Credit Billing Act 
D)  The Credit Lawsuit Act 
E)  The Consumer Credit Reporting Reform Act 
A)  The Truth in Lending and Consumer Leasing Acts 
B)  The Equal Credit Opportunity Act 
C)  The Fair Credit Billing Act 
D)  The Credit Lawsuit Act 
E)  The Consumer Credit Reporting Reform Act

Question 10

The most expensive loans are often provided by parents or other family members.

Accepted Answer

A) True 
 B)False

Question 11

If you think a bill is wrong or you want more information about the bill, then you and your creditor should follow all of the steps here except

Accepted Answer

A)  You should notify your creditor in writing. 
B)  You should pay the portion of the bill that is not in question. 
C)  Your creditor must acknowledge your letter within 30 days. 
D)  Your creditor must adjust your account or tell you why the bill is correct within two billing cycles. 
E)  Your creditor must reimburse you for your time spent researching the error. 
A)  You should notify your creditor in writing. 
B)  You should pay the portion of the bill that is not in question. 
C)  Your creditor must acknowledge your letter within 30 days. 
D)  Your creditor must adjust your account or tell you why the bill is correct within two billing cycles. 
E)  Your creditor must reimburse you for your time spent researching the error.

Question 12

Who is responsible for a loan repayment?

Accepted Answer

A)  The store granting credit 
B)  The credit card company 
C)  The government 
D)  The cosigner and/or the borrower 
E)  The bank 
A)  The store granting credit 
B)  The credit card company 
C)  The government 
D)  The cosigner and/or the borrower 
E)  The bank

Question 13

Many people expect

Accepted Answer

A)  Their ability to make payments to get harder over time. 
B)  Their incomes to increase to make it easier to make payments on past credit purchases. 
C)  Using credit will increase the amount of money available to spend in the future. 
D)  Their interest payments to increase as their credit balances decrease. 
E)  All of the above. 
A)  Their ability to make payments to get harder over time. 
B)  Their incomes to increase to make it easier to make payments on past credit purchases. 
C)  Using credit will increase the amount of money available to spend in the future. 
D)  Their interest payments to increase as their credit balances decrease. 
E)  All of the above.

Question 14

A consumer applies for open-end credit to make a single purchase, such as a large appliance.

Accepted Answer

A) True 
 B)False

Question 15

The amount of interest paid on a bill is not related to the length of the loan.

Accepted Answer

A) True 
 B)False

Question 16

If you are denied credit,

Accepted Answer

A)  You have a legal right to sue the credit bureau. 
B)  Your parent can purchase a copy of your credit report. 
C)  You have a legal right to sue the company that denied you credit. 
D)  The denial will remain in your credit file for 10 years. 
E)  You are entitled to a free copy of your credit report. 
A)  You have a legal right to sue the credit bureau. 
B)  Your parent can purchase a copy of your credit report. 
C)  You have a legal right to sue the company that denied you credit. 
D)  The denial will remain in your credit file for 10 years. 
E)  You are entitled to a free copy of your credit report.

Question 17

Researchers have discovered a link between credit scores and impatience.

Accepted Answer

A) True 
 B)False

Question 18

The annual percentage rate is lower than the stated rate for loans that are repaid in monthly payments.

Accepted Answer

A) True 
 B)False

Question 19

Credit can indicate stability since lenders consider you a good risk.

Accepted Answer

A) True 
 B)False

Question 20

The Equal Credit Opportunity Act (ECOA) prohibits a lender from discriminating based on

Accepted Answer

A)  Race. 
B)  Nationality. 
C)  Age. 
D)  Sex. 
E)  All of these are prohibited. 
A)  Race. 
B)  Nationality. 
C)  Age. 
D)  Sex. 
E)  All of these are prohibited.

A cash advance

Which of the following is NOT a valid reason for borrowing?

A credit card holder who pays the full balance during the grace period each month is actually getting a free loan from the credit card company.

A loan officer is examining whether or not to offer you a loan today. Specifically, she is examining your income and debts. Which of the five Cs of credit is the loan officer reviewing?

During the grace period, finance charges are assessed at only half the normal rate.

A loan that must be repaid in total on a specified day, usually within 30 to 90 days, is

A secured credit card is most appropriate for someone with a strong credit history .

The question "Will you repay the loan?" relates to

All of the following are consumer credit protection laws except

The most expensive loans are often provided by parents or other family members.

If you think a bill is wrong or you want more information about the bill, then you and your creditor should follow all of the steps here except

Who is responsible for a loan repayment?

Many people expect

A consumer applies for open-end credit to make a single purchase, such as a large appliance.

The amount of interest paid on a bill is not related to the length of the loan.

If you are denied credit,

Researchers have discovered a link between credit scores and impatience.

The annual percentage rate is lower than the stated rate for loans that are repaid in monthly payments.

Credit can indicate stability since lenders consider you a good risk.

The Equal Credit Opportunity Act (ECOA) prohibits a lender from discriminating based on

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters

Exam 5: Consumer Credit: Advantages, Disadvantages, Sources, and Costs

A cash advance

Which of the following is NOT a valid reason for borrowing?

A credit card holder who pays the full balance during the grace period each month is actually getting a free loan from the credit card company.

A loan officer is examining whether or not to offer you a loan today. Specifically, she is examining your income and debts. Which of the five Cs of credit is the loan officer reviewing?

During the grace period, finance charges are assessed at only half the normal rate.

A loan that must be repaid in total on a specified day, usually within 30 to 90 days, is

A secured credit card is most appropriate for someone with a strong credit history .

The question "Will you repay the loan?" relates to

All of the following are consumer credit protection laws except

The most expensive loans are often provided by parents or other family members.

If you think a bill is wrong or you want more information about the bill, then you and your creditor should follow all of the steps here except

Who is responsible for a loan repayment?

Many people expect

A consumer applies for open-end credit to make a single purchase, such as a large appliance.

The amount of interest paid on a bill is not related to the length of the loan.

If you are denied credit,

Researchers have discovered a link between credit scores and impatience.

The annual percentage rate is lower than the stated rate for loans that are repaid in monthly payments.

Credit can indicate stability since lenders consider you a good risk.

The Equal Credit Opportunity Act (ECOA) prohibits a lender from discriminating based on

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters