Question 1

Cedrick's credit card was stolen,and he did not realize that it was stolen until he received his most recent billing statement.He contacted the credit card company immediately after he read his statement.Fraudulent charges were as follows: $250 for a Blue-ray player,$600 for a new set of tires,$200 cash withdrawal,and $40 in interest charges on the above items.He did not carry credit card insurance.How much is Cedrick's potential maximum liability?

Accepted Answer

A) $40.00 
B) $50.00 
C) $850.00 
D) $1,050.00 
E) $1,090.00

Question 2

A secured credit card is a good tool to help establish credit.

Accepted Answer

A) True 
 B)False

Question 3

People with high credit card balances still need to invest money on a regular basis.

Accepted Answer

A) True 
 B)False

Question 4

What should Susan do in regards to her credit card balance?

Accepted Answer

A) She should continue to make minimum monthly payments. 
B) She should pay half of the balance this month and the remaining balance next month. 
C) She should take out a small loan to pay off the credit card. 
D) She should use some of her savings to pay off the balance in full immediately.

Question 5

________ is not information generally found in your credit report.

Accepted Answer

A) Employment information 
B) Personal credit history 
C) College attended,grades,etc. 
D) Your public financial history 
E) Past inquiries regarding your credit report

Question 6

How long do you have to begin an investigation into a billing problem under the Fair Credit Billing Act?

Accepted Answer

A) 15 days 
B) 20 days 
C) 30 days 
D) 60 days

Question 7

Susan has never seen a copy of her credit report.Which of the following is not a credit bureau?

Accepted Answer

A) Experian 
B) TransUnion 
C) Equifax 
D) Equitax

Question 8

Which of the following regarding credit application analysis is incorrect?

Accepted Answer

A) Bankruptcy remains a mark against you for a period of ten years after it occurs. 
B) Credit card issuers normally assign a minimal acceptable credit cutoff score. 
C) Lenders may not discriminate on the basis of age. 
D) You are entitled to one free copy of your credit report each year from the three major credit bureaus. 
E) None of the above statements is incorrect;all of the above are true statements.

Question 9

The Truth In Lending Act requires that all consumer credit agreements disclose the ________ in bold print?

Accepted Answer

A) Effective Annual Rate (EAR) 
B) Annual Percentage Rate (APR) 
C) Monthly Stated Rate (MSR) 
D) Nominal Interest Rate (NIR)

Question 10

List the five benefits or advantages associated with credit cards.What are the two major disadvantages?

Accepted Answer

The answer of List the five benefits or advantages associated...

Question 11

Consider the "Five Cs of Credit." The category that considers the size of your investment holding or portfolio is

Accepted Answer

A) collateral. 
B) capital. 
C) capacity. 
D) character. 
E) none of the above.

Question 12

A convenience user doesn't really care what the APY is on their credit cards.

Accepted Answer

A) True 
 B)False

Question 13

To a credit user,the perks and benefits are the most important determinant when choosing a credit card.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is NOT a credit bureau?

Accepted Answer

A) VantageScore 
B) Equifax 
C) TransUnion 
D) Experian

Question 15

Research has determined that undergraduate college students tend to behave in similar manners with regards to their credit card usage.As noted in Chapter 6,which of the following behaviors are indicative of undergraduate students' credit card behaviors?

Accepted Answer

A) Their parents do not frequently pay their credit card balances for them. 
B) They make more than their minimum payment each month but still tend to carry a balance on their cards. 
C) They pay off all of their cards in full each month. 
D) They make more than the required minimum payment on 90% of all other cards each month.

Question 16

It is now three months later and Monty has missed two payments in a row and he is now paying the default or penalty rate on his balance.How much interest per month will Monty be accruing on his unpaid balance?

Accepted Answer

A) 18% 
B) 1.5% 
C) 36% 
D) 3%

Question 17

Which of the following is not a single-purpose credit card?

Accepted Answer

A) Shell Oil 
B) Wells Fargo Visa 
C) Toys R Us 
D) Target 
E) Macy's

Question 18

A(n)________ card is a credit card that does not offer revolving credit and requires full payment of the balance at the end of each month.

Accepted Answer

A) T&E 
B) premium 
C) affinity 
D) traditional charge account 
E) single-purpose

Question 19

Which one of the following items of evaluation would Susan score the highest on?

Accepted Answer

A) Employment history 
B) Annual income 
C) Length of residence 
D) None of the above

Question 20

What is the main distinguishing feature(s)for T&E cards?

Accepted Answer

A) They do not offer revolving credit. 
B) The full balance must be paid each month. 
C) There is no annual fee. 
D) Both A and B above 
E) Both A and C above

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

A secured credit card is a good tool to help establish credit.

People with high credit card balances still need to invest money on a regular basis.

What should Susan do in regards to her credit card balance?

________ is not information generally found in your credit report.

How long do you have to begin an investigation into a billing problem under the Fair Credit Billing Act?

Susan has never seen a copy of her credit report.Which of the following is not a credit bureau?

Which of the following regarding credit application analysis is incorrect?

The Truth In Lending Act requires that all consumer credit agreements disclose the ________ in bold print?

List the five benefits or advantages associated with credit cards.What are the two major disadvantages?

Consider the "Five Cs of Credit." The category that considers the size of your investment holding or portfolio is

A convenience user doesn't really care what the APY is on their credit cards.

To a credit user,the perks and benefits are the most important determinant when choosing a credit card.

Which of the following is NOT a credit bureau?

Research has determined that undergraduate college students tend to behave in similar manners with regards to their credit card usage.As noted in Chapter 6,which of the following behaviors are indicative of undergraduate students' credit card behaviors?

It is now three months later and Monty has missed two payments in a row and he is now paying the default or penalty rate on his balance.How much interest per month will Monty be accruing on his unpaid balance?

Which of the following is not a single-purpose credit card?

A(n) ________ card is a credit card that does not offer revolving credit and requires full payment of the balance at the end of each month.

Which one of the following items of evaluation would Susan score the highest on?

What is the main distinguishing feature(s) for T&E cards?