Question 1

Some credit card companies will waive the annual fee on a credit card if

Accepted Answer

A)  you use the card infrequently. 
B)  you carry a large balance from month to month. 
C)  you pay your bills in a timely manner. 
D)  Credit card companies never waive annual fees. 
A)  you use the card infrequently. 
B)  you carry a large balance from month to month. 
C)  you pay your bills in a timely manner. 
D)  Credit card companies never waive annual fees.

Question 2

When obtaining a credit card, you should try to obtain

Accepted Answer

A)  the highest maximum limit possible. 
B)  a maximum limit high enough to cover necessary monthly purchases. 
C)  a maximum limit high enough to cover anything you might wish to purchase. 
D)  the lowest maximum limit possible to restrict your usage. 
A)  the highest maximum limit possible. 
B)  a maximum limit high enough to cover necessary monthly purchases. 
C)  a maximum limit high enough to cover anything you might wish to purchase. 
D)  the lowest maximum limit possible to restrict your usage.

Question 3

If it takes you four years to pay off a loan, you have to pay the total annual interest four times.

Accepted Answer

A) True 
 B)False

Question 4

All of the following are provisions of the Credit CARD Act of 2009, except

Accepted Answer

A)  cardholders must be given at least 21 days from the day in which the bill is mailed to make a payment. 
B)  cardholders younger than age 21 must show proof of their income or have a co-signer. 
C)  cardholders can spend beyond the limit imposed on the credit card. 
D)  promotional interest rates must be offered for a period of at least six months. 
A)  cardholders must be given at least 21 days from the day in which the bill is mailed to make a payment. 
B)  cardholders younger than age 21 must show proof of their income or have a co-signer. 
C)  cardholders can spend beyond the limit imposed on the credit card. 
D)  promotional interest rates must be offered for a period of at least six months.

Question 5

In comparing credit cards to other forms of credit, which of the following is true?

Accepted Answer

A)  Credit cards are generally the most expensive form of credit. 
B)  You should invest funds before paying off your credit cards. 
C)  It is prudent to borrow from some cards to pay off other credit cards. 
D)  All of the above. 
A)  Credit cards are generally the most expensive form of credit. 
B)  You should invest funds before paying off your credit cards. 
C)  It is prudent to borrow from some cards to pay off other credit cards. 
D)  All of the above.

Question 6

All of the following are true of the grace period on credit cards, except it

Accepted Answer

A)  is usually about 20 days. 
B)  applies only to cash advances. 
C)  is the time in between the time the statement is "closed" and the time the payment is due. 
D)  amounts to free credit time. 
A)  is usually about 20 days. 
B)  applies only to cash advances. 
C)  is the time in between the time the statement is "closed" and the time the payment is due. 
D)  amounts to free credit time.

Question 7

One advantage of using a credit card is that you receive a list of your purchases, which enables you to keep track of your spending.

Accepted Answer

A) True 
 B)False

Question 8

MasterCard and Visa credit cards are not accepted by gas stations such as Shell, which issue their own credit cards.

Accepted Answer

A) True 
 B)False

Question 9

You are presented two choices to borrow funds for a significant unexpected expenditure. it will take at least three years to pay off the loan assuming you make more than the minimum payment. Which choice is the least cost alternative in terms of interest paid over the life of the loan?

Accepted Answer

A)  A credit card with a variable interest rate of 4 % over the prime rate; for info, the latest forecast is for prime to stay below 5% throughout the life of your loan. 
B)  An interest only balloon payment loan for 3 years with 10% interest, but your monthly payments would be half of those compared to the credit card. 
C)  There is not enough information to make the decision. 
D)  Both A and B are about equal since the interest only payment aspect offsets the slightly higher interest rate on the credit card. 
A)  A credit card with a variable interest rate of 4 % over the prime rate; for info, the latest forecast is for prime to stay below 5% throughout the life of your loan. 
B)  An interest only balloon payment loan for 3 years with 10% interest, but your monthly payments would be half of those compared to the credit card. 
C)  There is not enough information to make the decision. 
D)  Both A and B are about equal since the interest only payment aspect offsets the slightly higher interest rate on the credit card.

Question 10

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

Accepted Answer

A)  Cash inflows 
B)  Country of birth 
C)  Capital and collateral 
D)  Cash outflows 
A)  Cash inflows 
B)  Country of birth 
C)  Capital and collateral 
D)  Cash outflows

Question 11

Even if you cannot pay your credit card bill in full, you should still attempt to pay as much as possible so that you can minimize finance charges.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is true about bank credit cards like VISA and MasterCard?

Accepted Answer

A)  They are an excellent source of emergency funds for unexpected expenses. 
B)  Their interest rate is generally lower than a loan at a credit union. 
C)  Like home equity loans, the interest paid on credit cards is tax deductible. 
D)  Their interest rate is lower than home equity lines of credit. 
A)  They are an excellent source of emergency funds for unexpected expenses. 
B)  Their interest rate is generally lower than a loan at a credit union. 
C)  Like home equity loans, the interest paid on credit cards is tax deductible. 
D)  Their interest rate is lower than home equity lines of credit.

Question 13

When applying for a credit card, the amount of savings that you have will not be a factor in the credit card company's decision.

Accepted Answer

A) True 
 B)False

Question 14

Ben owes $3500 on his credit card which bears an interest rate of 1.5% per month or 19.6% per year. Since Ben is maxed out on his credit limit, he is no longer charging anything to the card, but is only making the required monthly minimum payment which is 1.25% of the outstanding balance. How much of Ben's next payment will go towards paying off the outstanding balance?

Accepted Answer

A)  $10 per month 
B)  $0; Ben is not even paying enough to pay the monthly interest charge. 
C)  $8.75 
D)  $443.75 
A)  $10 per month 
B)  $0; Ben is not even paying enough to pay the monthly interest charge. 
C)  $8.75 
D)  $443.75

Question 15

Credit cards with tiered interest rates charge cardholders who

Accepted Answer

A)  carry large balances a lower rate. 
B)  pay off their balance monthly a higher rate. 
C)  make early payments a higher rate. 
D)  carry large balances a higher rate. 
A)  carry large balances a lower rate. 
B)  pay off their balance monthly a higher rate. 
C)  make early payments a higher rate. 
D)  carry large balances a higher rate.

Question 16

Cash advances on credit cards normally cost you interest from the date of the advance and also a transaction fee of 1 to 2%.

Accepted Answer

A) True 
 B)False

Question 17

Some credit cards offer card users cash rewards if they exceed a certain spending level each month.

Accepted Answer

A) True 
 B)False

Question 18

A credit card that can only be used in establishments of the issuer is called a(n) ________ credit card.

Accepted Answer

retail or

Question 19

If you borrowed $8,700 at 6% for one year, what would your total interest be if you are charged simple interest?

Accepted Answer

A)  $600 
B)  $9,222 
C)  $522 
D)  $700 
A)  $600 
B)  $9,222 
C)  $522 
D)  $700

Question 20

The previous balance method takes into account the time that you pay off any part of the outstanding balance.

Accepted Answer

A) True 
 B)False

Some credit card companies will waive the annual fee on a credit card if

When obtaining a credit card, you should try to obtain

If it takes you four years to pay off a loan, you have to pay the total annual interest four times.

All of the following are provisions of the Credit CARD Act of 2009, except

In comparing credit cards to other forms of credit, which of the following is true?

All of the following are true of the grace period on credit cards, except it

One advantage of using a credit card is that you receive a list of your purchases, which enables you to keep track of your spending.

MasterCard and Visa credit cards are not accepted by gas stations such as Shell, which issue their own credit cards.

You are presented two choices to borrow funds for a significant unexpected expenditure. it will take at least three years to pay off the loan assuming you make more than the minimum payment. Which choice is the least cost alternative in terms of interest paid over the life of the loan?

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

Even if you cannot pay your credit card bill in full, you should still attempt to pay as much as possible so that you can minimize finance charges.

Which of the following statements is true about bank credit cards like VISA and MasterCard?

When applying for a credit card, the amount of savings that you have will not be a factor in the credit card company's decision.

Credit cards with tiered interest rates charge cardholders who

Cash advances on credit cards normally cost you interest from the date of the advance and also a transaction fee of 1 to 2%.

Some credit cards offer card users cash rewards if they exceed a certain spending level each month.

A credit card that can only be used in establishments of the issuer is called a(n) ________ credit card.

If you borrowed $8,700 at 6% for one year, what would your total interest be if you are charged simple interest?

The previous balance method takes into account the time that you pay off any part of the outstanding balance.

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

Some credit card companies will waive the annual fee on a credit card if

When obtaining a credit card, you should try to obtain

If it takes you four years to pay off a loan, you have to pay the total annual interest four times.

All of the following are provisions of the Credit CARD Act of 2009, except

In comparing credit cards to other forms of credit, which of the following is true?

All of the following are true of the grace period on credit cards, except it

One advantage of using a credit card is that you receive a list of your purchases, which enables you to keep track of your spending.

MasterCard and Visa credit cards are not accepted by gas stations such as Shell, which issue their own credit cards.

You are presented two choices to borrow funds for a significant unexpected expenditure. it will take at least three years to pay off the loan assuming you make more than the minimum payment. Which choice is the least cost alternative in terms of interest paid over the life of the loan?

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

Even if you cannot pay your credit card bill in full, you should still attempt to pay as much as possible so that you can minimize finance charges.

Which of the following statements is true about bank credit cards like VISA and MasterCard?

When applying for a credit card, the amount of savings that you have will not be a factor in the credit card company's decision.

Credit cards with tiered interest rates charge cardholders who

Cash advances on credit cards normally cost you interest from the date of the advance and also a transaction fee of 1 to 2%.

Some credit cards offer card users cash rewards if they exceed a certain spending level each month.

A credit card that can only be used in establishments of the issuer is called a(n) ________ credit card.

If you borrowed $8,700 at 6% for one year, what would your total interest be if you are charged simple interest?

The previous balance method takes into account the time that you pay off any part of the outstanding balance.

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