Question 1

A credit card issued by a financial institution and secured by funds deposited by the cardholder is a

Accepted Answer

A)  prepaid card. 
B)  protected card. 
C)  secured card. 
D)  proprietary card. 
A)  prepaid card. 
B)  protected card. 
C)  secured card. 
D)  proprietary card. C

Question 2

The easiest way to establish credit is to

Accepted Answer

A)  purchase a new car with a car loan. 
B)  purchase a house with a mortgage. 
C)  obtain a credit card. 
D)  pay cash for all your purchases. 
A)  purchase a new car with a car loan. 
B)  purchase a house with a mortgage. 
C)  obtain a credit card. 
D)  pay cash for all your purchases. C

Question 3

The interest you pay when using credit cards can have a major impact on the total amount you owe.

Accepted Answer

A) True 
 B)False  True

Question 4

All of the following are disadvantages of proprietary credit cards, except

Accepted Answer

A)  your purchases are limited to a single merchant per card. 
B)  you may need several credit cards. 
C)  you receive several billing statements. 
D)  it takes considerable time to process your application to allow you to begin obtaining credit. 
A)  your purchases are limited to a single merchant per card. 
B)  you may need several credit cards. 
C)  you receive several billing statements. 
D)  it takes considerable time to process your application to allow you to begin obtaining credit.

Question 5

A credit card statement lists purchases that were made with the credit card as well as any balance carried forward from the previous statement.

Accepted Answer

A) True 
 B)False

Question 6

Credit cards are generally used for such purchases as

Accepted Answer

A)  cars. 
B)  homes. 
C)  meals, clothing, and groceries. 
D)  stocks. 
A)  cars. 
B)  homes. 
C)  meals, clothing, and groceries. 
D)  stocks.

Question 7

Credit cards have all of the following advantages, except

Accepted Answer

A)  they allow you to borrow cash interest free for 60 days. 
B)  you can make purchases without carrying cash. 
C)  you obtain free financing until the bill is due. 
D)  you receive an itemized monthly statement. 
A)  they allow you to borrow cash interest free for 60 days. 
B)  you can make purchases without carrying cash. 
C)  you obtain free financing until the bill is due. 
D)  you receive an itemized monthly statement.

Question 8

If your credit card company decides to increase your interest rate, it must notify you 30 days in advance.

Accepted Answer

A) True 
 B)False

Question 9

If you have credit problems, you should contact a credit repair service instead of trying to resolve the issues yourself.

Accepted Answer

A) True 
 B)False

Question 10

When using your credit card frequently, it is wise to

Accepted Answer

A)  pay off the balance every month. 
B)  make only the minimum payment to conserve cash. 
C)  use the card that offers the most points regardless of other provisions. 
D)  Both A and C are correct. 
A)  pay off the balance every month. 
B)  make only the minimum payment to conserve cash. 
C)  use the card that offers the most points regardless of other provisions. 
D)  Both A and C are correct.

Question 11

When you apply for a credit card, the potential creditor will look at which of the following as a source of future debt payments if necessary?

Accepted Answer

A)  Cash outflows 
B)  Credit history 
C)  Potential inheritances 
D)  Balances in savings accounts 
A)  Cash outflows 
B)  Credit history 
C)  Potential inheritances 
D)  Balances in savings accounts

Question 12

Describe the advantages and disadvantages of credit cards.

Accepted Answer

Advantages: take advantage of discounts

Question 13

You should invest in risky investments instead of paying off your credit card debt because the return might be higher than the cost of financing.

Accepted Answer

A) True 
 B)False

Question 14

There is no cost to the merchant when you use a MasterCard or Visa credit card.

Accepted Answer

A) True 
 B)False

Question 15

Identifying specific goals for managing your credit is an important part of your personal financial plan.

Accepted Answer

A) True 
 B)False

Question 16

If you discover an error on your credit card statement, you should not pay any portion of the balance until the matter has been resolved.

Accepted Answer

A) True 
 B)False

Question 17

The ________ is usually about 20 days after the credit card statement is closed.

Accepted Answer

The answer of The ________ is usually about 20 days...

Question 18

Suppose you have a credit card balance of $500 that you were unable to pay off. During the current month you purchase another $250 worth of products. You made a payment during the grace period of $300. Assuming your retail credit card company charges an annual interest rate of 22%, compute your new balance.

Accepted Answer

A)  $510.00 
B)  $250.00 
C)  $494.00 
D)  $453.67 
A)  $510.00 
B)  $250.00 
C)  $494.00 
D)  $453.67

Question 19

If you pay your total credit card balance before the grace period, you normally are not charged any interest.

Accepted Answer

A) True 
 B)False

Question 20

If you find yourself with an excessive credit card balance, the first thing you should do is

Accepted Answer

A)  borrow funds from family members. 
B)  quit school and get a job. 
C)  spend as little as possible. 
D)  file for personal bankruptcy. 
A)  borrow funds from family members. 
B)  quit school and get a job. 
C)  spend as little as possible. 
D)  file for personal bankruptcy.

A credit card issued by a financial institution and secured by funds deposited by the cardholder is a

The easiest way to establish credit is to

The interest you pay when using credit cards can have a major impact on the total amount you owe.

All of the following are disadvantages of proprietary credit cards, except

A credit card statement lists purchases that were made with the credit card as well as any balance carried forward from the previous statement.

Credit cards are generally used for such purchases as

Credit cards have all of the following advantages, except

If your credit card company decides to increase your interest rate, it must notify you 30 days in advance.

If you have credit problems, you should contact a credit repair service instead of trying to resolve the issues yourself.

When using your credit card frequently, it is wise to

When you apply for a credit card, the potential creditor will look at which of the following as a source of future debt payments if necessary?

Describe the advantages and disadvantages of credit cards.

You should invest in risky investments instead of paying off your credit card debt because the return might be higher than the cost of financing.

There is no cost to the merchant when you use a MasterCard or Visa credit card.

Identifying specific goals for managing your credit is an important part of your personal financial plan.

If you discover an error on your credit card statement, you should not pay any portion of the balance until the matter has been resolved.

The ________ is usually about 20 days after the credit card statement is closed.

If you pay your total credit card balance before the grace period, you normally are not charged any interest.

If you find yourself with an excessive credit card balance, the first thing you should do is

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Exam 8: Managing Your Credit

A credit card issued by a financial institution and secured by funds deposited by the cardholder is a

The easiest way to establish credit is to

The interest you pay when using credit cards can have a major impact on the total amount you owe.

All of the following are disadvantages of proprietary credit cards, except

A credit card statement lists purchases that were made with the credit card as well as any balance carried forward from the previous statement.

Credit cards are generally used for such purchases as

Credit cards have all of the following advantages, except

If your credit card company decides to increase your interest rate, it must notify you 30 days in advance.

If you have credit problems, you should contact a credit repair service instead of trying to resolve the issues yourself.

When using your credit card frequently, it is wise to

When you apply for a credit card, the potential creditor will look at which of the following as a source of future debt payments if necessary?

Describe the advantages and disadvantages of credit cards.

You should invest in risky investments instead of paying off your credit card debt because the return might be higher than the cost of financing.

There is no cost to the merchant when you use a MasterCard or Visa credit card.

Identifying specific goals for managing your credit is an important part of your personal financial plan.

If you discover an error on your credit card statement, you should not pay any portion of the balance until the matter has been resolved.

The ________ is usually about 20 days after the credit card statement is closed.

If you pay your total credit card balance before the grace period, you normally are not charged any interest.

If you find yourself with an excessive credit card balance, the first thing you should do is

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters