Question 1

Having completed a personal finance class,you are now ready to give some advice to your free-spending friends.Which one is unwise?

Accepted Answer

A) Reduce the credit card balance. 
B) Resolve any billing errors. 
C) Quit using credit cards altogether. 
D) Look for trouble signs in credit card spending. 
E) Control your spending through discipline. 
A) Reduce the credit card balance. 
B) Resolve any billing errors. 
C) Quit using credit cards altogether. 
D) Look for trouble signs in credit card spending. 
E) Control your spending through discipline.

Question 2

List the three primary methods used to determine interest charges on an unpaid credit card balance.

Accepted Answer

(1)the average daily

Question 3

Which of the five Cs of credit would your actual home be in relation to your mortgage?

Accepted Answer

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

Question 4

Changes to credit card policies and rates are usually announced via "bill addendums," which are notices enclosed with your bill.

Accepted Answer

A) True 
 B)False

Question 5

The average daily balance method calculates interest payments based on the ending balance of the previous period.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a disadvantage of credit cards?

Accepted Answer

A) Allows for consumption before the purchase is fully paid for 
B) Emergency use 
C) Allows for online shopping 
D) The finance charge that accrues on the account if not paid off in full each month 
A) Allows for consumption before the purchase is fully paid for 
B) Emergency use 
C) Allows for online shopping 
D) The finance charge that accrues on the account if not paid off in full each month

Question 7

What advice might you give to Jerome?

Accepted Answer

A) Keep making timely,minimum payments. 
B) Get a cash advance to pay down the balances on the cards. 
C) Consider using savings to pay off current credit card debt. 
D) All of this advice would be helpful to Jerome. 
A) Keep making timely,minimum payments. 
B) Get a cash advance to pay down the balances on the cards. 
C) Consider using savings to pay off current credit card debt. 
D) All of this advice would be helpful to Jerome.

Question 8

According to a Nellie Mae study,________ of graduate students would have liked more information on financial management topics before they started school and would like financial management education made available to them now.

Accepted Answer

A) 33 percent 
B) 53 percent 
C) 73 percent 
D) 93 percent 
A) 33 percent 
B) 53 percent 
C) 73 percent 
D) 93 percent

Question 9

Financially savvy people take advantage of the grace period on major purchases and pay the balance off in full;thus avoiding finance charges.

Accepted Answer

A) True 
 B)False

Question 10

Everyone who accessed your credit report within the last seven years appears in an "inquiry" list that appears on your credit report.

Accepted Answer

A) True 
 B)False

Question 11

What is the current APY on this credit card if it is compounded monthly?

Accepted Answer

A) 18% 
B) 18.66% 
C) 18.99% 
D) 19.56% 
E) None of the above 
A) 18% 
B) 18.66% 
C) 18.99% 
D) 19.56% 
E) None of the above

Question 12

The main factor that determines the cost of a line of credit is the ________,which is also considered the true simple interest rate paid over the life of the loan.

Accepted Answer

A) annual merchant rate (AMR) 
B) teaser rate 
C) annual percentage rate (APR) 
D) penalty rate 
A) annual merchant rate (AMR) 
B) teaser rate 
C) annual percentage rate (APR) 
D) penalty rate

Question 13

Most credit users are more interested in free benefits than low APRs.

Accepted Answer

A) True 
 B)False

Question 14

The use of credit involves receiving cash,goods,or services with an obligation to pay later.Which statement is not an opening line to the use of credit in a shopper's language?

Accepted Answer

A) "Charge it." 
B) "Put it on my account." 
C) "Put it on my debit." 
D) "I'll pay for it with plastic." 
A) "Charge it." 
B) "Put it on my account." 
C) "Put it on my debit." 
D) "I'll pay for it with plastic."

Question 15

Most credit cards have a ________ grace period from the date of the bill to make payments.

Accepted Answer

A) 1- to 15-day 
B) 5- to 20-day 
C) 21 to 25-day 
D) 31- to 35-day 
A) 1- to 15-day 
B) 5- to 20-day 
C) 21 to 25-day 
D) 31- to 35-day

Question 16

Wally currently has a balance of $14,500 on his credit cards and he is having a hard time making the minimum payments on them.He has missed several payments and is now paying the default APR of 29.99%.He and his wife own a nice home with $40,000 in equity.They have $7,500 in a certificate of deposit with a 4% APR.He has come to you in tears asking for advice.What would you tell him to do?

Accepted Answer

A) Seek out a non-profit credit counseling company. 
B) Cash out his CD and pay down his credit cards. 
C) Become a convenience user,and maintain just one credit card. 
D) Take out an equity loan on the house. 
E) All of the above 
A) Seek out a non-profit credit counseling company. 
B) Cash out his CD and pay down his credit cards. 
C) Become a convenience user,and maintain just one credit card. 
D) Take out an equity loan on the house. 
E) All of the above

Question 17

Your credit card company cannot increase your rate for the first 12 months after you open an account unless

Accepted Answer

A) your card has a fixed interest rate tied to an index and the index goes down. 
B) your card's introductory rate expires and your rate reverts to the "go-to" rate the company disclosed when you got the card. 
C) you are more than 15 days late in paying your bill. 
D) all of the above. 
A) your card has a fixed interest rate tied to an index and the index goes down. 
B) your card's introductory rate expires and your rate reverts to the "go-to" rate the company disclosed when you got the card. 
C) you are more than 15 days late in paying your bill. 
D) all of the above.

Question 18

When you find you cannot pay your credit card bills you must take action! Which option is advisable?

Accepted Answer

A) Adjust your budget to allow for more money to pay for the cards. 
B) Change to a less expensive credit card or cards. 
C) Use a secured loan or home equity loan to get a lower interest rate to pay the cards off. 
D) Use savings to pay off some or all of current credit card debt. 
E) All of the above 
A) Adjust your budget to allow for more money to pay for the cards. 
B) Change to a less expensive credit card or cards. 
C) Use a secured loan or home equity loan to get a lower interest rate to pay the cards off. 
D) Use savings to pay off some or all of current credit card debt. 
E) All of the above

Question 19

A Credit Bureau

Accepted Answer

A) contains information on your personal lifestyle. 
B) makes decisions about issuing credit. 
C) does not assign a score. 
D) contains information regarding your financial situation and dealings. 
A) contains information on your personal lifestyle. 
B) makes decisions about issuing credit. 
C) does not assign a score. 
D) contains information regarding your financial situation and dealings.

Question 20

Angela tried to use her Macy's credit card at Target but was unsuccessful because Target only accepts Target credit cards.

Accepted Answer

A) True 
 B)False

Having completed a personal finance class,you are now ready to give some advice to your free-spending friends.Which one is unwise?

List the three primary methods used to determine interest charges on an unpaid credit card balance.

Which of the five Cs of credit would your actual home be in relation to your mortgage?

Changes to credit card policies and rates are usually announced via "bill addendums," which are notices enclosed with your bill.

The average daily balance method calculates interest payments based on the ending balance of the previous period.

Which of the following is a disadvantage of credit cards?

What advice might you give to Jerome?

According to a Nellie Mae study,________ of graduate students would have liked more information on financial management topics before they started school and would like financial management education made available to them now.

Financially savvy people take advantage of the grace period on major purchases and pay the balance off in full;thus avoiding finance charges.

Everyone who accessed your credit report within the last seven years appears in an "inquiry" list that appears on your credit report.

What is the current APY on this credit card if it is compounded monthly?

The main factor that determines the cost of a line of credit is the ________,which is also considered the true simple interest rate paid over the life of the loan.

Most credit users are more interested in free benefits than low APRs.

The use of credit involves receiving cash,goods,or services with an obligation to pay later.Which statement is not an opening line to the use of credit in a shopper's language?

Most credit cards have a ________ grace period from the date of the bill to make payments.

Your credit card company cannot increase your rate for the first 12 months after you open an account unless

When you find you cannot pay your credit card bills you must take action! Which option is advisable?

A Credit Bureau

Angela tried to use her Macy's credit card at Target but was unsuccessful because Target only accepts Target credit cards.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 6: Using Credit Cards: the Role of Open Credit

Having completed a personal finance class,you are now ready to give some advice to your free-spending friends.Which one is unwise?

List the three primary methods used to determine interest charges on an unpaid credit card balance.

Which of the five Cs of credit would your actual home be in relation to your mortgage?

Changes to credit card policies and rates are usually announced via "bill addendums," which are notices enclosed with your bill.

The average daily balance method calculates interest payments based on the ending balance of the previous period.

Which of the following is a disadvantage of credit cards?

What advice might you give to Jerome?

According to a Nellie Mae study,________ of graduate students would have liked more information on financial management topics before they started school and would like financial management education made available to them now.

Financially savvy people take advantage of the grace period on major purchases and pay the balance off in full;thus avoiding finance charges.

Everyone who accessed your credit report within the last seven years appears in an "inquiry" list that appears on your credit report.

What is the current APY on this credit card if it is compounded monthly?

The main factor that determines the cost of a line of credit is the ________,which is also considered the true simple interest rate paid over the life of the loan.

Most credit users are more interested in free benefits than low APRs.

The use of credit involves receiving cash,goods,or services with an obligation to pay later.Which statement is not an opening line to the use of credit in a shopper's language?

Most credit cards have a ________ grace period from the date of the bill to make payments.

Your credit card company cannot increase your rate for the first 12 months after you open an account unless

When you find you cannot pay your credit card bills you must take action! Which option is advisable?

A Credit Bureau

Angela tried to use her Macy's credit card at Target but was unsuccessful because Target only accepts Target credit cards.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters