Question 1

Discuss how many credit cards you think you should have and why.

Accepted Answer

Subjective answer ranging from

Question 2

By reviewing your credit card statement, you can determine all of the following, except

Accepted Answer

A)  total purchases made year-to-date. 
B)  your available credit remaining. 
C)  if a payment can be made that will avoid interest charges. 
D)  how much time you have to make a payment. 
A)  total purchases made year-to-date. 
B)  your available credit remaining. 
C)  if a payment can be made that will avoid interest charges. 
D)  how much time you have to make a payment.

Question 3

Jill just borrowed $6,000 and will be charged a simple interest rate of 12 percent. Jill will pay ________ interest for borrowing the money on September 1 and repaying the money on December 31.

Accepted Answer

A)  $240 
B)  $420 
C)  $720 
D)  $1,200 
A)  $240 
B)  $420 
C)  $720 
D)  $1,200

Question 4

All of the following are true of prestige credit cards, except they

Accepted Answer

A)  have a longer grace period than other cards. 
B)  may have substantially higher fees. 
C)  provide extra benefits to cardholders. 
D)  are given to individuals who have an exceptional credit standing. 
A)  have a longer grace period than other cards. 
B)  may have substantially higher fees. 
C)  provide extra benefits to cardholders. 
D)  are given to individuals who have an exceptional credit standing.

Question 5

Credit limits may be as high as $10,000 for those credit card holders who have an exceptional credit history.

Accepted Answer

A) True 
 B)False

Question 6

The annual percentage rate (APR) is all of the following, except

Accepted Answer

A)  a simple interest rate for borrowing money for a year. 
B)  it requires a complex formula to compute. 
C)  it includes fees such as application processing fees. 
D)  it allows easy comparison of financing costs among various creditors. 
A)  a simple interest rate for borrowing money for a year. 
B)  it requires a complex formula to compute. 
C)  it includes fees such as application processing fees. 
D)  it allows easy comparison of financing costs among various creditors.

Question 7

A credit card statement will not show the method of calculating finance charges.

Accepted Answer

A) True 
 B)False

Question 8

New regulations that provide clearer and more favorable financing rules for individual credit card users do all of the following, except

Accepted Answer

A)  prohibit interest rate increases on purchases made in the past on the card 
B)  cap the amount of any increase to 5%. 
C)  require a 45-day notice of any credit card interest rate increase. 
D)  None of these. 
A)  prohibit interest rate increases on purchases made in the past on the card 
B)  cap the amount of any increase to 5%. 
C)  require a 45-day notice of any credit card interest rate increase. 
D)  None of these.

Question 9

In 2009 Congress passed the Credit Card Act to protect consumers who use credit card services.

Accepted Answer

A) True 
 B)False

Question 10

Because credit card interest rates are usually quite high, you should pay off your credit card balances before you invest funds anywhere else.

Accepted Answer

A) True 
 B)False

Question 11

When making payments on a credit card, the amount paid is first applied to ________ and the remainder is applied to ________.

Accepted Answer

A)  late fees; interest 
B)  balance due; late fees 
C)  interest for the month; balance due 
D)  The entire payment is applied to the balance due. 
A)  late fees; interest 
B)  balance due; late fees 
C)  interest for the month; balance due 
D)  The entire payment is applied to the balance due.

Question 12

One advantage of credit cards is that you can receive free financing if you pay off your balance each month.

Accepted Answer

A) True 
 B)False

Question 13

One of the disadvantages of credit cards is that they allow you to spend beyond your means.

Accepted Answer

A) True 
 B)False

Question 14

Advantages of using credit include the ability to make purchases without cash and the convenience of not carrying checks.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following personal information should not be asked on a credit card application?

Accepted Answer

A)  Stocks and bonds owned 
B)  Race or ethnic group 
C)  Employment history 
D)  Expenses and commitments 
A)  Stocks and bonds owned 
B)  Race or ethnic group 
C)  Employment history 
D)  Expenses and commitments

Question 16

You are considering applying for one of two credit cards. Credit card "A" has an annual fee of $30 and charges interest of 10%. Credit card "B" has no annual fee, but charges an interest rate of 15%. If you carry an average balance of $500 on your credit card, the lowest total annual expenses you could have with one of these two credit cards would be

Accepted Answer

A)  $50. 
B)  $80. 
C)  $75. 
D)  $90. 
A)  $50. 
B)  $80. 
C)  $75. 
D)  $90.

Question 17

Credit card companies' fees cannot exceed ________of the initial credit limit.

Accepted Answer

A)  more than 5% 
B)  more than 10% 
C)  more than 50% 
D)  more than 25% 
A)  more than 5% 
B)  more than 10% 
C)  more than 50% 
D)  more than 25%

Question 18

Compute the new balance on a credit card assuming that: • Beginning balance = $450
• Purchases during the month = $300
• Payments made within the grace period = $250
• Interest rate = 18%

Accepted Answer

A)  $550 
B)  $503 
C)  $516 
D)  $1,000 
A)  $550 
B)  $503 
C)  $516 
D)  $1,000

Question 19

What is the interest cost and the total amount due on a six-month loan of $1,500 at 13.2% simple annual interest?

Accepted Answer

A)  $99; $1,500 
B)  $99; $1,599 
C)  $198; $1,698 
D)  $198; $1,500 
A)  $99; $1,500 
B)  $99; $1,599 
C)  $198; $1,698 
D)  $198; $1,500

Question 20

Credit cards can eliminate the need for carrying large amounts of cash.

Accepted Answer

A) True 
 B)False

Discuss how many credit cards you think you should have and why.

By reviewing your credit card statement, you can determine all of the following, except

Jill just borrowed $6,000 and will be charged a simple interest rate of 12 percent. Jill will pay ________ interest for borrowing the money on September 1 and repaying the money on December 31.

All of the following are true of prestige credit cards, except they

Credit limits may be as high as $10,000 for those credit card holders who have an exceptional credit history.

The annual percentage rate (APR) is all of the following, except

A credit card statement will not show the method of calculating finance charges.

New regulations that provide clearer and more favorable financing rules for individual credit card users do all of the following, except

In 2009 Congress passed the Credit Card Act to protect consumers who use credit card services.

Because credit card interest rates are usually quite high, you should pay off your credit card balances before you invest funds anywhere else.

When making payments on a credit card, the amount paid is first applied to and the remainder is applied to .

One advantage of credit cards is that you can receive free financing if you pay off your balance each month.

One of the disadvantages of credit cards is that they allow you to spend beyond your means.

Advantages of using credit include the ability to make purchases without cash and the convenience of not carrying checks.

Which of the following personal information should not be asked on a credit card application?

Credit card companies' fees cannot exceed ________of the initial credit limit.

Compute the new balance on a credit card assuming that: • Beginning balance = $450 • Purchases during the month = $300 • Payments made within the grace period = $250 • Interest rate = 18%

What is the interest cost and the total amount due on a six-month loan of $1,500 at 13.2% simple annual interest?

Credit cards can eliminate the need for carrying large amounts of cash.

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

Discuss how many credit cards you think you should have and why.

By reviewing your credit card statement, you can determine all of the following, except

Jill just borrowed $6,000 and will be charged a simple interest rate of 12 percent. Jill will pay ________ interest for borrowing the money on September 1 and repaying the money on December 31.

All of the following are true of prestige credit cards, except they

Credit limits may be as high as $10,000 for those credit card holders who have an exceptional credit history.

The annual percentage rate (APR) is all of the following, except

A credit card statement will not show the method of calculating finance charges.

New regulations that provide clearer and more favorable financing rules for individual credit card users do all of the following, except

In 2009 Congress passed the Credit Card Act to protect consumers who use credit card services.

Because credit card interest rates are usually quite high, you should pay off your credit card balances before you invest funds anywhere else.

When making payments on a credit card, the amount paid is first applied to ________ and the remainder is applied to ________.

One advantage of credit cards is that you can receive free financing if you pay off your balance each month.

One of the disadvantages of credit cards is that they allow you to spend beyond your means.

Advantages of using credit include the ability to make purchases without cash and the convenience of not carrying checks.

Which of the following personal information should not be asked on a credit card application?

Credit card companies' fees cannot exceed ________of the initial credit limit.

Compute the new balance on a credit card assuming that: • Beginning balance = $450 • Purchases during the month = $300 • Payments made within the grace period = $250 • Interest rate = 18%

What is the interest cost and the total amount due on a six-month loan of $1,500 at 13.2% simple annual interest?

Credit cards can eliminate the need for carrying large amounts of cash.

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

When making payments on a credit card, the amount paid is first applied to and the remainder is applied to .