Question 1

A credit card holder is in default when he or she fails to meet any requirement of a credit agreement.

Accepted Answer

A) True 
 B)False

Question 2

If no payment is received by the due date on a credit account,

Accepted Answer

A) a credit bureau may be notified of slow payment. 
B) the company may begin collection efforts. 
C) the cardholder may be declared in default. 
D) (All of these) 
A) a credit bureau may be notified of slow payment. 
B) the company may begin collection efforts. 
C) the cardholder may be declared in default. 
D) (All of these)

Question 3

On declining-balance installment loans,the APR is the same as interest rate applied if there are no fees charged on the loan.

Accepted Answer

A) True 
 B)False

Question 4

With open-end credit,credit is extended in advance of any transaction,and the borrower must reapply each time credit is desired.

Accepted Answer

A) True 
 B)False

Question 5

The legal right to seize and dispose of property to obtain payment of an unpaid claim is called a(n)

Accepted Answer

A) acceleration clause. 
B) garnishment. 
C) chattel mortgage. 
D) lien. 
A) acceleration clause. 
B) garnishment. 
C) chattel mortgage. 
D) lien.

Question 6

Most credit cards have a grace period only if

Accepted Answer

A) you made the minimum payment the previous month. 
B) you paid the full finance charge the previous month. 
C) you paid the balance in full the previous month. 
D) you made no additional charges since the previous billing. 
A) you made the minimum payment the previous month. 
B) you paid the full finance charge the previous month. 
C) you paid the balance in full the previous month. 
D) you made no additional charges since the previous billing.

Question 7

Charge accounts are referred to as open-end credit because they

Accepted Answer

A) allow repeated borrowing without having to reapply for the credit each time. 
B) don't have to be paid off completely each month. 
C) make use of a plastic card. 
D) can be used to purchase merchandise or to borrow cash. 
A) allow repeated borrowing without having to reapply for the credit each time. 
B) don't have to be paid off completely each month. 
C) make use of a plastic card. 
D) can be used to purchase merchandise or to borrow cash.

Question 8

A bank credit card account is an open-end account at a financial institution that allows the holder to make purchases almost anywhere.

Accepted Answer

A) True 
 B)False

Question 9

Credit card costs can include

Accepted Answer

A) annual fees. 
B) interest. 
C) transaction fees. 
D) All of these. 
A) annual fees. 
B) interest. 
C) transaction fees. 
D) All of these.

Question 10

During the period that a billing dispute is being investigated,creditors cannot send dunning letters.

Accepted Answer

A) True 
 B)False

Question 11

Service credit is granted to consumers by public utilities,physicians,dentists,and other service providers that do not require full payment when services are rendered.

Accepted Answer

A) True 
 B)False

Question 12

Wise users of credit have a no-annual-fee card for convenience purchases and a low-APR card for purchases where they carry a balance.

Accepted Answer

A) True 
 B)False

Question 13

When the declining-balance method of calculating interest on installment loans is used,the simple rate of interest and the APR will differ only if fees boost the finance charge.

Accepted Answer

A) True 
 B)False

Question 14

Credit life and credit disability insurance are fairly priced.

Accepted Answer

A) True 
 B)False

Question 15

Credit interest rates that go up and down according to interest rates in the economy as a whole are referred to as

Accepted Answer

A) teaser rates 
B) variable rates. 
C) penalty APRs. 
D) prime rates. 
A) teaser rates 
B) variable rates. 
C) penalty APRs. 
D) prime rates.

Question 16

Noninstallment credit includes

Accepted Answer

A) single-payment loans. 
B) open-end credit. 
C) monthly-payment loans. 
D) both single-payment loans and open-end credit. 
A) single-payment loans. 
B) open-end credit. 
C) monthly-payment loans. 
D) both single-payment loans and open-end credit.

Question 17

Justin had a beginning balance of $100 on his credit card as of May 1 last month.On May 11 he charged a meal for $44.On May 21 he made a payment of $48.What was his average daily balance for the month?

Accepted Answer

A) $46 
B) $94 
C) $100 
D) $113 
A) $46 
B) $94 
C) $100 
D) $113

Question 18

When the declining-balance method is used to calculate interest on an installment loan,the periodic interest rate is applied to the

Accepted Answer

A) beginning loan balance. 
B) outstanding balance each period. 
C) average balance for each year. 
D) average balance for the entire loan period. 
A) beginning loan balance. 
B) outstanding balance each period. 
C) average balance for each year. 
D) average balance for the entire loan period.

Question 19

Craig has just been quoted what appears to be a very competitive loan for $3,500 to be paid back in 36 monthly payments of $123.47 and a finance charge of $945.However,the lender said that the interest would be calculated using the add-on method.Using the n-ratio method of estimating the APR,what is the APR on this loan?
$ \mathrm{APR}=\frac{\mathrm{Y}(95 \mathrm{P}+9) \mathrm{F}}{12 \mathrm{P}(\mathrm{P}+1)(4 \mathrm{D}+\mathrm{F})} $

Accepted Answer

A) 14.9 percent 
B) 16.3 percent 
C) 9.0 percent 
D) 13.2 percent 
A) 14.9 percent 
B) 16.3 percent 
C) 9.0 percent 
D) 13.2 percent

Question 20

An unsecured personal loan can be accessed by writing special checks.

Accepted Answer

A) True 
 B)False

A credit card holder is in default when he or she fails to meet any requirement of a credit agreement.

If no payment is received by the due date on a credit account,

On declining-balance installment loans,the APR is the same as interest rate applied if there are no fees charged on the loan.

With open-end credit,credit is extended in advance of any transaction,and the borrower must reapply each time credit is desired.

The legal right to seize and dispose of property to obtain payment of an unpaid claim is called a(n)

Most credit cards have a grace period only if

Charge accounts are referred to as open-end credit because they

A bank credit card account is an open-end account at a financial institution that allows the holder to make purchases almost anywhere.

Credit card costs can include

During the period that a billing dispute is being investigated,creditors cannot send dunning letters.

Service credit is granted to consumers by public utilities,physicians,dentists,and other service providers that do not require full payment when services are rendered.

Wise users of credit have a no-annual-fee card for convenience purchases and a low-APR card for purchases where they carry a balance.

When the declining-balance method of calculating interest on installment loans is used,the simple rate of interest and the APR will differ only if fees boost the finance charge.

Credit life and credit disability insurance are fairly priced.

Credit interest rates that go up and down according to interest rates in the economy as a whole are referred to as

Noninstallment credit includes

Justin had a beginning balance of $100 on his credit card as of May 1 last month.On May 11 he charged a meal for $44.On May 21 he made a payment of $48.What was his average daily balance for the month?

When the declining-balance method is used to calculate interest on an installment loan,the periodic interest rate is applied to the

An unsecured personal loan can be accessed by writing special checks.

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 credit card holder is in default when he or she fails to meet any requirement of a credit agreement.

If no payment is received by the due date on a credit account,

On declining-balance installment loans,the APR is the same as interest rate applied if there are no fees charged on the loan.

With open-end credit,credit is extended in advance of any transaction,and the borrower must reapply each time credit is desired.

The legal right to seize and dispose of property to obtain payment of an unpaid claim is called a(n)

Most credit cards have a grace period only if

Charge accounts are referred to as open-end credit because they

A bank credit card account is an open-end account at a financial institution that allows the holder to make purchases almost anywhere.

Credit card costs can include

During the period that a billing dispute is being investigated,creditors cannot send dunning letters.

Service credit is granted to consumers by public utilities,physicians,dentists,and other service providers that do not require full payment when services are rendered.

Wise users of credit have a no-annual-fee card for convenience purchases and a low-APR card for purchases where they carry a balance.

When the declining-balance method of calculating interest on installment loans is used,the simple rate of interest and the APR will differ only if fees boost the finance charge.

Credit life and credit disability insurance are fairly priced.

Credit interest rates that go up and down according to interest rates in the economy as a whole are referred to as

Noninstallment credit includes

Justin had a beginning balance of $100 on his credit card as of May 1 last month.On May 11 he charged a meal for $44.On May 21 he made a payment of $48.What was his average daily balance for the month?

When the declining-balance method is used to calculate interest on an installment loan,the periodic interest rate is applied to the

An unsecured personal loan can be accessed by writing special checks.

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