Question 1

The amount owed on a debt is the principal.

Accepted Answer

A) True 
 B)False

Question 2

Banks that issue credit cards typically impose penalty APRs on certain borrowers to raise the APR for the entire debt repayment when

Accepted Answer

A) a payment is more than 60 days late. 
B) a payment by check is returned for insufficient funds. 
C) market conditions result in a restriction of credit. 
D) both a payment is more than 60 days late and a payment by check is returned for insufficient funds on accounts at that bank. 
A) a payment is more than 60 days late. 
B) a payment by check is returned for insufficient funds. 
C) market conditions result in a restriction of credit. 
D) both a payment is more than 60 days late and a payment by check is returned for insufficient funds on accounts at that bank.

Question 3

As a gesture of goodwill,most companies waive the $50 fee for unauthorized use of credit cards when notified promptly of the unauthorized use.

Accepted Answer

A) True 
 B)False

Question 4

By making the minimum payment on a typical credit card,a borrower will have the debt paid off in about two years.

Accepted Answer

A) True 
 B)False

Question 5

All types of open-end credit accounts allow multiple uses without reapplication,but some require that the entire balance be repaid each month.

Accepted Answer

A) True 
 B)False

Question 6

Cash advance checks can be used for which of the following purposes?

Accepted Answer

A) Make a purchase or pay a bill 
B) Pay the balance of another credit card 
C) Cashed to obtain liquid funds 
D) All of these. 
A) Make a purchase or pay a bill 
B) Pay the balance of another credit card 
C) Cashed to obtain liquid funds 
D) All of these.

Question 7

Which of the following is an example of an unsecured debt?

Accepted Answer

A) auto loan 
B) second mortgage 
C) signature loan 
D) first mortgage 
A) auto loan 
B) second mortgage 
C) signature loan 
D) first mortgage

Question 8

If you are likely to pay your balance in full each and every month,select a credit card with

Accepted Answer

A) a grace period and no annual fee. 
B) a low APR. 
C) credit life insurance. 
D) credit disability insurance. 
A) a grace period and no annual fee. 
B) a low APR. 
C) credit life insurance. 
D) credit disability insurance.

Question 9

If you purchase an item using a credit card and later take it back for a refund you will receive

Accepted Answer

A) a credit receipt and the amount will be charged back to the merchant by your card issuer. 
B) a check in the mail for the refund. 
C) a cash refund. 
D) higher credit score. 
A) a credit receipt and the amount will be charged back to the merchant by your card issuer. 
B) a check in the mail for the refund. 
C) a cash refund. 
D) higher credit score.

Question 10

New credit card accounts sometimes come with a low introductory rate for the first few months.

Accepted Answer

A) True 
 B)False

Question 11

If your credit card issuer allows you to "skip a payment," interest will not be charged for the month.

Accepted Answer

A) True 
 B)False

Question 12

Consumer credit is non-business debt used by consumers for expenditures including home mortgages.

Accepted Answer

A) True 
 B)False

Question 13

A retail credit card allows a customer to make purchases on credit at any of the outlets of a particular retailer or retail chain.

Accepted Answer

A) True 
 B)False

Question 14

A retail credit card allows the holder to make purchases at numerous businesses.

Accepted Answer

A) True 
 B)False

Question 15

Chargebacks are the same as cash discounts.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following credit contract clauses requires that all remaining payments on an installment debt be paid on demand of the creditor after a specific number of payments are unpaid?

Accepted Answer

A) Repossession 
B) Acceleration 
C) Balloon 
D) Prepayment penalty 
A) Repossession 
B) Acceleration 
C) Balloon 
D) Prepayment penalty

Question 17

Many installment loan contracts that use the add-on method include a prepayment penalty,a special charge to the borrower for paying off a loan earlier than the final due date.

Accepted Answer

A) True 
 B)False

Question 18

Hillary borrowed $2,000 from her credit union to purchase a new computer.This is an example of

Accepted Answer

A) a cash loan. 
B) a purchase loan. 
C) a sales credit. 
D) All of these. 
A) a cash loan. 
B) a purchase loan. 
C) a sales credit. 
D) All of these.

Question 19

Letters from a creditor demanding immediate payment for a past due account are referred to as

Accepted Answer

A) illegal harassment. 
B) dunning letters. 
C) letters of insistence. 
D) garnishment. 
A) illegal harassment. 
B) dunning letters. 
C) letters of insistence. 
D) garnishment.

Question 20

A cash advance can be obtained by using

Accepted Answer

A) service accounts. 
B) bank credit card accounts. 
C) retail accounts. 
D) service accounts and retail accounts. 
A) service accounts. 
B) bank credit card accounts. 
C) retail accounts. 
D) service accounts and retail accounts.

The amount owed on a debt is the principal.

Banks that issue credit cards typically impose penalty APRs on certain borrowers to raise the APR for the entire debt repayment when

As a gesture of goodwill,most companies waive the $50 fee for unauthorized use of credit cards when notified promptly of the unauthorized use.

By making the minimum payment on a typical credit card,a borrower will have the debt paid off in about two years.

All types of open-end credit accounts allow multiple uses without reapplication,but some require that the entire balance be repaid each month.

Cash advance checks can be used for which of the following purposes?

Which of the following is an example of an unsecured debt?

If you are likely to pay your balance in full each and every month,select a credit card with

If you purchase an item using a credit card and later take it back for a refund you will receive

New credit card accounts sometimes come with a low introductory rate for the first few months.

If your credit card issuer allows you to "skip a payment," interest will not be charged for the month.

Consumer credit is non-business debt used by consumers for expenditures including home mortgages.

A retail credit card allows a customer to make purchases on credit at any of the outlets of a particular retailer or retail chain.

A retail credit card allows the holder to make purchases at numerous businesses.

Chargebacks are the same as cash discounts.

Which of the following credit contract clauses requires that all remaining payments on an installment debt be paid on demand of the creditor after a specific number of payments are unpaid?

Many installment loan contracts that use the add-on method include a prepayment penalty,a special charge to the borrower for paying off a loan earlier than the final due date.

Hillary borrowed $2,000 from her credit union to purchase a new computer.This is an example of

Letters from a creditor demanding immediate payment for a past due account are referred to as

A cash advance can be obtained by using

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

The amount owed on a debt is the principal.

Banks that issue credit cards typically impose penalty APRs on certain borrowers to raise the APR for the entire debt repayment when

As a gesture of goodwill,most companies waive the $50 fee for unauthorized use of credit cards when notified promptly of the unauthorized use.

By making the minimum payment on a typical credit card,a borrower will have the debt paid off in about two years.

All types of open-end credit accounts allow multiple uses without reapplication,but some require that the entire balance be repaid each month.

Cash advance checks can be used for which of the following purposes?

Which of the following is an example of an unsecured debt?

If you are likely to pay your balance in full each and every month,select a credit card with

If you purchase an item using a credit card and later take it back for a refund you will receive

New credit card accounts sometimes come with a low introductory rate for the first few months.

If your credit card issuer allows you to "skip a payment," interest will not be charged for the month.

Consumer credit is non-business debt used by consumers for expenditures including home mortgages.

A retail credit card allows a customer to make purchases on credit at any of the outlets of a particular retailer or retail chain.

A retail credit card allows the holder to make purchases at numerous businesses.

Chargebacks are the same as cash discounts.

Which of the following credit contract clauses requires that all remaining payments on an installment debt be paid on demand of the creditor after a specific number of payments are unpaid?

Many installment loan contracts that use the add-on method include a prepayment penalty,a special charge to the borrower for paying off a loan earlier than the final due date.

Hillary borrowed $2,000 from her credit union to purchase a new computer.This is an example of

Letters from a creditor demanding immediate payment for a past due account are referred to as

A cash advance can be obtained by using

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