Question 1

A borrower who has failed to make a payment of principal or interest when due or meet any other requirement of a credit agreement is said to be in foreclosure.

Accepted Answer

A) True 
 B)False

Question 2

The contract supporting a credit card account is called a(n)

Accepted Answer

A) promissory note. 
B) credit card agreement. 
C) indenture. 
D) chattel note. 
A) promissory note. 
B) credit card agreement. 
C) indenture. 
D) chattel note.

Question 3

A secured loan requires

Accepted Answer

A) collateral. 
B) a cosigner. 
C) an excellent credit rating. 
D) either collateral or a cosigner. 
A) collateral. 
B) a cosigner. 
C) an excellent credit rating. 
D) either collateral or a cosigner.

Question 4

The FCBA helps people who wish to dispute billing errors on revolving credit accounts.

Accepted Answer

A) True 
 B)False

Question 5

Your goal should be to use credit cards in a manner that avoids all fees,including finance charges.This means paying at least the minimum payment every month.

Accepted Answer

A) True 
 B)False

Question 6

An unsecured personal loan is a line of credit available on an as-needed basis.

Accepted Answer

A) True 
 B)False

Question 7

Almost all installment loan contracts contain an acceleration clause stating that after a specific number of payments are unpaid,the loan is in default,and all remaining installments are due and payable on demand of the creditor.

Accepted Answer

A) True 
 B)False

Question 8

Vickie wants to borrow $5,000 for three years.She will repay the $5,000 plus the finance charges in one lump sum at the end of the three-year period.If the lender charges her 12 percent add-on interest,how much will Vickie pay in finance charges?

Accepted Answer

A) $600 
B) $1,800 
C) $6,800 
D) $5,600 
A) $600 
B) $1,800 
C) $6,800 
D) $5,600

Question 9

An installment loan is also called open-end credit.

Accepted Answer

A) True 
 B)False

Question 10

An installment purchase agreement provides a measure of protection for

Accepted Answer

A) the borrower. 
B) the creditor. 
C) the lender. 
D) All of these. 
A) the borrower. 
B) the creditor. 
C) the lender. 
D) All of these.

Question 11

The outstanding balance owed on a debt is the

Accepted Answer

A) APR. 
B) principal. 
C) finance charge. 
D) equity. 
A) APR. 
B) principal. 
C) finance charge. 
D) equity.

Question 12

When a person makes a purchase on credit with no cash passing between the borrower and the lender,this is called a cash loan.

Accepted Answer

A) True 
 B)False

Question 13

The contract supporting an installment loan is called a(n)

Accepted Answer

A) promissory note. 
B) garnishment. 
C) indenture. 
D) chattel note. 
A) promissory note. 
B) garnishment. 
C) indenture. 
D) chattel note.

Question 14

The rule of 78s is a commonly used method of calculating the

Accepted Answer

A) interest rate. 
B) finance charges. 
C) prepayment penalty. 
D) balloon payment. 
A) interest rate. 
B) finance charges. 
C) prepayment penalty. 
D) balloon payment.

Question 15

A requirement of the federal Truth in Lending Act (TIL) requires that all installment loan lenders disclose to credit applicants

Accepted Answer

A) the interest rate expressed as an annual percentage rate (APR). 
B) the finance charge expressed in dollars. 
C) the interest rate (as an APR) and the finance charge (in dollars). 
D) neither the interest rate (as an APR) nor the finance charge (in dollars). 
A) the interest rate expressed as an annual percentage rate (APR). 
B) the finance charge expressed in dollars. 
C) the interest rate (as an APR) and the finance charge (in dollars). 
D) neither the interest rate (as an APR) nor the finance charge (in dollars).

Question 16

With declining-balance loans,there are no prepayment penalties.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not an example of an open-end credit account?

Accepted Answer

A) Retail credit card accounts 
B) Bank credit cards 
C) aSingle-payment loans 
D) Travel and entertainment cards 
A) Retail credit card accounts 
B) Bank credit cards 
C) aSingle-payment loans 
D) Travel and entertainment cards

Question 18

Annual and transaction fees are not required to be included in the APR calculation for a credit card because they cannot be known in advance.

Accepted Answer

A) True 
 B)False

Question 19

Which type of credit card is issued through retail sellers and businesses?

Accepted Answer

A) Travel and entertainment credit cards 
B) Bank credit cards 
C) Retail credit cards 
D) Prestige credit cards 
A) Travel and entertainment credit cards 
B) Bank credit cards 
C) Retail credit cards 
D) Prestige credit cards

Question 20

The cost of credit on a yearly basis as a percentage rate is called the APR.

Accepted Answer

A) True 
 B)False

A borrower who has failed to make a payment of principal or interest when due or meet any other requirement of a credit agreement is said to be in foreclosure.

The contract supporting a credit card account is called a(n)

A secured loan requires

The FCBA helps people who wish to dispute billing errors on revolving credit accounts.

Your goal should be to use credit cards in a manner that avoids all fees,including finance charges.This means paying at least the minimum payment every month.

An unsecured personal loan is a line of credit available on an as-needed basis.

Almost all installment loan contracts contain an acceleration clause stating that after a specific number of payments are unpaid,the loan is in default,and all remaining installments are due and payable on demand of the creditor.

Vickie wants to borrow $5,000 for three years.She will repay the $5,000 plus the finance charges in one lump sum at the end of the three-year period.If the lender charges her 12 percent add-on interest,how much will Vickie pay in finance charges?

An installment loan is also called open-end credit.

An installment purchase agreement provides a measure of protection for

The outstanding balance owed on a debt is the

When a person makes a purchase on credit with no cash passing between the borrower and the lender,this is called a cash loan.

The contract supporting an installment loan is called a(n)

The rule of 78s is a commonly used method of calculating the

A requirement of the federal Truth in Lending Act (TIL) requires that all installment loan lenders disclose to credit applicants

With declining-balance loans,there are no prepayment penalties.

Which of the following is not an example of an open-end credit account?

Annual and transaction fees are not required to be included in the APR calculation for a credit card because they cannot be known in advance.

Which type of credit card is issued through retail sellers and businesses?

The cost of credit on a yearly basis as a percentage rate is called the APR.

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

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Exam 7: Credit Cards and Consumer Loans

A borrower who has failed to make a payment of principal or interest when due or meet any other requirement of a credit agreement is said to be in foreclosure.

The contract supporting a credit card account is called a(n)

A secured loan requires

The FCBA helps people who wish to dispute billing errors on revolving credit accounts.

Your goal should be to use credit cards in a manner that avoids all fees,including finance charges.This means paying at least the minimum payment every month.

An unsecured personal loan is a line of credit available on an as-needed basis.

Almost all installment loan contracts contain an acceleration clause stating that after a specific number of payments are unpaid,the loan is in default,and all remaining installments are due and payable on demand of the creditor.

Vickie wants to borrow $5,000 for three years.She will repay the $5,000 plus the finance charges in one lump sum at the end of the three-year period.If the lender charges her 12 percent add-on interest,how much will Vickie pay in finance charges?

An installment loan is also called open-end credit.

An installment purchase agreement provides a measure of protection for

The outstanding balance owed on a debt is the

When a person makes a purchase on credit with no cash passing between the borrower and the lender,this is called a cash loan.

The contract supporting an installment loan is called a(n)

The rule of 78s is a commonly used method of calculating the

A requirement of the federal Truth in Lending Act (TIL) requires that all installment loan lenders disclose to credit applicants

With declining-balance loans,there are no prepayment penalties.

Which of the following is not an example of an open-end credit account?

Annual and transaction fees are not required to be included in the APR calculation for a credit card because they cannot be known in advance.

Which type of credit card is issued through retail sellers and businesses?

The cost of credit on a yearly basis as a percentage rate is called the APR.

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters