Question 1

Overspending will help you manage your budget effectively.

Accepted Answer

A) True 
 B)False

Question 2

Paying a loan on schedule is one way to build a good credit history.

Accepted Answer

A) True 
 B)False

Question 3

The most expensive method for determining finance charges on revolving credit would be the:

Accepted Answer

A) average daily balance (AD
B) method including new purchases. 
B) average daily balance (AD
B) method excluding new purchases. 
C) annual percentage rate (APR)method including new purchases. 
D) annual percentage rate (APR)method excluding new purchases. 
E) annual percentage rate (APR)method excluding new purchases for student cards. 
A) average daily balance (AD
B) method including new purchases. 
B) average daily balance (AD
B) method excluding new purchases. 
C) annual percentage rate (APR)method including new purchases. 
D) annual percentage rate (APR)method excluding new purchases. 
E) annual percentage rate (APR)method excluding new purchases for student cards.

Question 4

Most lenders immediately will _____ the first time that you have difficulty meeting your loan payments.

Accepted Answer

A) double your interest rate 
B) file a legal case 
C) grant an extension 
D) erase your debt 
E) repossess the property you purchased 
A) double your interest rate 
B) file a legal case 
C) grant an extension 
D) erase your debt 
E) repossess the property you purchased

Question 5

A retail charge card can be accessed by writing checks against demand deposit.

Accepted Answer

A) True 
 B)False

Question 6

Always paying cash helps in establishing a high level of creditworthiness.

Accepted Answer

A) True 
 B)False

Question 7

Arranging for and fully repaying a small loan helps improve creditworthiness.

Accepted Answer

A) True 
 B)False

Question 8

Straight bankruptcy is allowed under _____  of the bankruptcy code.

Accepted Answer

A) Chapter 4 
B) Chapter 7 
C) Chapter 13 
D) Chapter 19 
E) Chapter 9 
A) Chapter 4 
B) Chapter 7 
C) Chapter 13 
D) Chapter 19 
E) Chapter 9

Question 9

A credit card user's credit rating will be hampered if he or she pays only the minimum monthly payment on a credit card.

Accepted Answer

A) True 
 B)False

Question 10

Credit scoring systems are often used by lenders to determine applicants' creditworthiness.

Accepted Answer

A) True 
 B)False

Question 11

Credit should not be consistently used for purchasing nondurable goods.

Accepted Answer

A) True 
 B)False

Question 12

Retail charge cards are advantageous to merchants because:

Accepted Answer

A) they help the merchants get loans. 
B) they help build consumer loyalty. 
C) they help the merchants file for bankruptcy. 
D) they help the merchants save taxes. 
E) they help the merchants give loans to their suppliers. 
A) they help the merchants get loans. 
B) they help build consumer loyalty. 
C) they help the merchants file for bankruptcy. 
D) they help the merchants save taxes. 
E) they help the merchants give loans to their suppliers.

Question 13

If you initiated the telephone call, it is okay to give your credit card account number when ordering or purchasing from major catalog houses, airlines, hotels, and so on.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a major reason to use credit?

Accepted Answer

A) Weekly purchase of food 
B) Monthly payment of utility bills 
C) Regular payment of small cash outlays 
D) Frequent impulse purchases 
E) Occasionally for convenience 
A) Weekly purchase of food 
B) Monthly payment of utility bills 
C) Regular payment of small cash outlays 
D) Frequent impulse purchases 
E) Occasionally for convenience

Question 15

The FICO credit scoring system assigns points according to:

Accepted Answer

A) amounts owed. 
B) marital status. 
C) employment history. 
D) salary. 
E) where you live. 
A) amounts owed. 
B) marital status. 
C) employment history. 
D) salary. 
E) where you live.

Question 16

Which of the following statements about credit scoring systems is true?

Accepted Answer

A) Lower credit scores are better than higher credit scores. 
B) The credit scoring system is based on extensive statistical studies. 
C) Credit unions calculate and sell credit scores to lenders. 
D) FICO scores consider age, gender, marital status, and so on. 
E) Strength in key personal traits shows that you are a good risk for lenders and reduce your credit score. 
A) Lower credit scores are better than higher credit scores. 
B) The credit scoring system is based on extensive statistical studies. 
C) Credit unions calculate and sell credit scores to lenders. 
D) FICO scores consider age, gender, marital status, and so on. 
E) Strength in key personal traits shows that you are a good risk for lenders and reduce your credit score.

Question 17

Janey makes frequent small purchases and pays off the total outstanding balance on her credit card every month. Which of the following features is most attractive to her when searching for a credit card provider?

Accepted Answer

A) A low required minimum payment percentage 
B) A high interest rate 
C) High over-the-limit fees 
D) No grace period 
E) No annual fee 
A) A low required minimum payment percentage 
B) A high interest rate 
C) High over-the-limit fees 
D) No grace period 
E) No annual fee

Question 18

The most common method used by lenders to apply finance charges on credit cards is the average daily balance method including new purchases.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following forms of consumer credit is among the cheapest and offers limited tax deductions?

Accepted Answer

A) Overdraft protection lines 
B) Home equity credit lines 
C) Credit cards 
D) Unsecured personal credit 
E) The Wage Earner Plan 
A) Overdraft protection lines 
B) Home equity credit lines 
C) Credit cards 
D) Unsecured personal credit 
E) The Wage Earner Plan

Question 20

All credit cards have annual fees.

Accepted Answer

A) True 
 B)False

Overspending will help you manage your budget effectively.

Paying a loan on schedule is one way to build a good credit history.

The most expensive method for determining finance charges on revolving credit would be the:

Most lenders immediately will _____ the first time that you have difficulty meeting your loan payments.

A retail charge card can be accessed by writing checks against demand deposit.

Always paying cash helps in establishing a high level of creditworthiness.

Arranging for and fully repaying a small loan helps improve creditworthiness.

Straight bankruptcy is allowed under _____ of the bankruptcy code.

A credit card user's credit rating will be hampered if he or she pays only the minimum monthly payment on a credit card.

Credit scoring systems are often used by lenders to determine applicants' creditworthiness.

Credit should not be consistently used for purchasing nondurable goods.

Retail charge cards are advantageous to merchants because:

If you initiated the telephone call, it is okay to give your credit card account number when ordering or purchasing from major catalog houses, airlines, hotels, and so on.

Which of the following is a major reason to use credit?

The FICO credit scoring system assigns points according to:

Which of the following statements about credit scoring systems is true?

Janey makes frequent small purchases and pays off the total outstanding balance on her credit card every month. Which of the following features is most attractive to her when searching for a credit card provider?

The most common method used by lenders to apply finance charges on credit cards is the average daily balance method including new purchases.

Which of the following forms of consumer credit is among the cheapest and offers limited tax deductions?

All credit cards have annual fees.

Understanding the Financial Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 6: Using Credit

Overspending will help you manage your budget effectively.

Paying a loan on schedule is one way to build a good credit history.

The most expensive method for determining finance charges on revolving credit would be the:

Most lenders immediately will _____ the first time that you have difficulty meeting your loan payments.

A retail charge card can be accessed by writing checks against demand deposit.

Always paying cash helps in establishing a high level of creditworthiness.

Arranging for and fully repaying a small loan helps improve creditworthiness.

Straight bankruptcy is allowed under _____ of the bankruptcy code.

A credit card user's credit rating will be hampered if he or she pays only the minimum monthly payment on a credit card.

Credit scoring systems are often used by lenders to determine applicants' creditworthiness.

Credit should not be consistently used for purchasing nondurable goods.

Retail charge cards are advantageous to merchants because:

If you initiated the telephone call, it is okay to give your credit card account number when ordering or purchasing from major catalog houses, airlines, hotels, and so on.

Which of the following is a major reason to use credit?

The FICO credit scoring system assigns points according to:

Which of the following statements about credit scoring systems is true?

Janey makes frequent small purchases and pays off the total outstanding balance on her credit card every month. Which of the following features is most attractive to her when searching for a credit card provider?

The most common method used by lenders to apply finance charges on credit cards is the average daily balance method including new purchases.

Which of the following forms of consumer credit is among the cheapest and offers limited tax deductions?

All credit cards have annual fees.

Understanding the Financial Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters