Question 1

The information gathered from your loan application and the credit bureau establishes your credit rating.

Accepted Answer

A) True 
 B)False

Question 2

Home equity loans should be used for

Accepted Answer

A)  Buying dinner at a restaurant. 
B)  Borrowing money for impulse purchases. 
C)  Major expenses such as home improvements or education. 
D)  Getting cash for weekend entertainment. 
E)  Selling a car. 
A)  Buying dinner at a restaurant. 
B)  Borrowing money for impulse purchases. 
C)  Major expenses such as home improvements or education. 
D)  Getting cash for weekend entertainment. 
E)  Selling a car.

Question 3

Closed-end credit consists of loans made on a continuous basis with periodic bills for at least partial payment.

Accepted Answer

A) True 
 B)False

Question 4

Tanya received a $1,000 loan from the bank for a vacation. The bank is using the simple interest formula for this one-year, 9% loan. What is her total interest?

Accepted Answer

A)  $9 
B)  $45 
C)  $90 
D)  $450 
E)  $1,009 
A)  $9 
B)  $45 
C)  $90 
D)  $450 
E)  $1,009

Question 5

When used effectively, credit can help a consumer have more and enjoy more.

Accepted Answer

A) True 
 B)False

Question 6

What step can you take if your credit application is denied?

Accepted Answer

A)  Sue the credit rating agency. 
B)  File a complaint against the merchant. 
C)  Ask the reasons why you were denied credit. 
D)  Reapply for credit once 30 days have passed. 
E)  Borrowers do not have any rights provided by law. 
A)  Sue the credit rating agency. 
B)  File a complaint against the merchant. 
C)  Ask the reasons why you were denied credit. 
D)  Reapply for credit once 30 days have passed. 
E)  Borrowers do not have any rights provided by law.

Question 7

A personal bankruptcy remains on a credit file for no more than 5 years.

Accepted Answer

A) True 
 B)False

Question 8

The higher your FICO score, the more risk you pose to creditors.

Accepted Answer

A) True 
 B)False

Question 9

If you miss payments on a home equity loan, you can lose your

Accepted Answer

A)  Savings account. 
B)  Car. 
C)  House. 
D)  Retirement account. 
E)  Furnishings. 
A)  Savings account. 
B)  Car. 
C)  House. 
D)  Retirement account. 
E)  Furnishings.

Question 10

The easiest loans to obtain are also the least expensive.

Accepted Answer

A) True 
 B)False

Question 11

The Consumer Credit Counseling Service

Accepted Answer

A)  Aids families with serious debt problems by helping them to manage their money better and set up a realistic budget. 
B)  Is a consolidation firm that will manage bills for a percentage of the total payment due. 
C)  Is a for profit organization 
D)  Is a program to wipe out your debts within two years. 
E)  Is a program to setup bankruptcy proceedings 
A)  Aids families with serious debt problems by helping them to manage their money better and set up a realistic budget. 
B)  Is a consolidation firm that will manage bills for a percentage of the total payment due. 
C)  Is a for profit organization 
D)  Is a program to wipe out your debts within two years. 
E)  Is a program to setup bankruptcy proceedings

Question 12

According to the Fair Credit Billing Act of 1975, a consumer may tell a credit card company to stop payment for a defective good if the consumer has made a sincere attempt to resolve the problem with the store.

Accepted Answer

A) True 
 B)False

Question 13

Open-end credit consists of loans made on a continuous basis with periodic bills for at least partial payment.

Accepted Answer

A) True 
 B)False

Question 14

To protect your credit card, you should keep a record of your credit card number separate from your card.

Accepted Answer

A) True 
 B)False

Question 15

Experts suggest that the debt payments-to-income ratio should be a maximum of

Accepted Answer

A)  15% 
B)  20% 
C)  25% 
D)  50% 
E)  100% 
A)  15% 
B)  20% 
C)  25% 
D)  50% 
E)  100%

Question 16

Paul borrowed $200 to be repaid in one year. He paid 10% interest and a service charge of $3.00. What is his finance charge?

Accepted Answer

A)  $3.00 
B)  $20.00 
C)  $23.00 
D)  $200.00 
E)  $223.00 
A)  $3.00 
B)  $20.00 
C)  $23.00 
D)  $200.00 
E)  $223.00

Question 17

Hannah has liabilities totaling $30,000 (excluding her mortgage of $100,000). Her net worth is $45,000. What is her debt-to-equity ratio?

Accepted Answer

A)  .45 
B)  .67 
C)  .75 
D)  1.00 
E)  1.30 
A)  .45 
B)  .67 
C)  .75 
D)  1.00 
E)  1.30

Question 18

If a loan is being paid in installments instead of one lump sum at the end of the loan period, the actual rate of interest

Accepted Answer

A)  Will be lower than the stated rate. 
B)  Will be the same as the stated rate. 
C)  Will be higher than the stated rate. 
D)  Will be unrelated to the stated rate. 
E)  Cannot be determined without knowing the length of the loan period. 
A)  Will be lower than the stated rate. 
B)  Will be the same as the stated rate. 
C)  Will be higher than the stated rate. 
D)  Will be unrelated to the stated rate. 
E)  Cannot be determined without knowing the length of the loan period.

Question 19

Many people use credit to live within their means.

Accepted Answer

A) True 
 B)False

Question 20

Installment credit, in which the debt is repaid in equal installments over a specified period of time, exploded on the American scene with the advent of the

Accepted Answer

A)  Airplane 
B)  Automobile 
C)  Cell phone 
D)  Computer 
E)  Train 
A)  Airplane 
B)  Automobile 
C)  Cell phone 
D)  Computer 
E)  Train

The information gathered from your loan application and the credit bureau establishes your credit rating.

Home equity loans should be used for

Closed-end credit consists of loans made on a continuous basis with periodic bills for at least partial payment.

Tanya received a $1,000 loan from the bank for a vacation. The bank is using the simple interest formula for this one-year, 9% loan. What is her total interest?

When used effectively, credit can help a consumer have more and enjoy more.

What step can you take if your credit application is denied?

A personal bankruptcy remains on a credit file for no more than 5 years.

The higher your FICO score, the more risk you pose to creditors.

If you miss payments on a home equity loan, you can lose your

The easiest loans to obtain are also the least expensive.

The Consumer Credit Counseling Service

According to the Fair Credit Billing Act of 1975, a consumer may tell a credit card company to stop payment for a defective good if the consumer has made a sincere attempt to resolve the problem with the store.

Open-end credit consists of loans made on a continuous basis with periodic bills for at least partial payment.

To protect your credit card, you should keep a record of your credit card number separate from your card.

Experts suggest that the debt payments-to-income ratio should be a maximum of

Paul borrowed $200 to be repaid in one year. He paid 10% interest and a service charge of $3.00. What is his finance charge?

Hannah has liabilities totaling $30,000 (excluding her mortgage of $100,000). Her net worth is $45,000. What is her debt-to-equity ratio?

If a loan is being paid in installments instead of one lump sum at the end of the loan period, the actual rate of interest

Many people use credit to live within their means.

Installment credit, in which the debt is repaid in equal installments over a specified period of time, exploded on the American scene with the advent of the

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

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

The information gathered from your loan application and the credit bureau establishes your credit rating.

Home equity loans should be used for

Closed-end credit consists of loans made on a continuous basis with periodic bills for at least partial payment.

Tanya received a $1,000 loan from the bank for a vacation. The bank is using the simple interest formula for this one-year, 9% loan. What is her total interest?

When used effectively, credit can help a consumer have more and enjoy more.

What step can you take if your credit application is denied?

A personal bankruptcy remains on a credit file for no more than 5 years.

The higher your FICO score, the more risk you pose to creditors.

If you miss payments on a home equity loan, you can lose your

The easiest loans to obtain are also the least expensive.

The Consumer Credit Counseling Service

According to the Fair Credit Billing Act of 1975, a consumer may tell a credit card company to stop payment for a defective good if the consumer has made a sincere attempt to resolve the problem with the store.

Open-end credit consists of loans made on a continuous basis with periodic bills for at least partial payment.

To protect your credit card, you should keep a record of your credit card number separate from your card.

Experts suggest that the debt payments-to-income ratio should be a maximum of

Paul borrowed $200 to be repaid in one year. He paid 10% interest and a service charge of $3.00. What is his finance charge?

Hannah has liabilities totaling $30,000 (excluding her mortgage of $100,000). Her net worth is $45,000. What is her debt-to-equity ratio?

If a loan is being paid in installments instead of one lump sum at the end of the loan period, the actual rate of interest

Many people use credit to live within their means.

Installment credit, in which the debt is repaid in equal installments over a specified period of time, exploded on the American scene with the advent of the

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