Exam 6: Using Credit

Student credit cards typically require that one be enrolled in a 2- or 4-year college/university and:

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

Personal insolvency can be legally satisfied by:

The amount of finance charges one pays on a credit card depends only on the annual percentage rate (APR)and the amount one charges.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -An improper use of extended credit would be to buy [a car | nondurable goods].

Ann Marie accumulated a large balance on her credit card while in college.She is trying to get it paid off as quickly as possible and wants to roll the balance onto a new credit card.She now uses a credit card only for emergencies.What should Ann Marie look for in a credit card given the large balance and the way she plans to use the card?

Thirty-day or regular charge accounts require the customers to pay off the debt 20 to 30 days after the billing date with no interest expense.

_____ does not represent a line of credit.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -You are likely to have financial difficulty if your personal credit obligations exceed [15% | 20%] of your take-home pay.

A(n)_____ is an agency that provides credit information about individual borrowers to lenders.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -One condition of a secured credit card is that the holder must [pay a higher rate of interest | deposit an amount equal to the credit line in a savings account].

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -A home equity lines of credit is one of the [most | least] expensive forms of consumer credit.

Student credit cards are structured much differently than regular credit cards.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -The majority of reduction in consumer indebtedness is due to [loan defaults | loan repayments].

Interest rates on credit cards tend to be lower than most other forms of consumer credit.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Rebate cards are most useful for consumers who charge a lot and [maintain | do not maintain] large balances of their cards.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -The decision whether or not to grant you credit will be made by [individual creditors | the credit bureau].

Credit reports on individual borrowers are issued by credit bureau,a type of reporting agency.

_____ cards offer the cardholder a way to contribute to a worthy cause,sometimes described as "Credit cards with a cause."

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