Question 1

Which one of the following is a disadvantage of using credit?

Accepted Answer

A) Receiving advance notice of sales 
B) Temptation to overspend 
C) Avoiding the necessity of carrying cash 
D) Ease of returning merchandise 
E) Having a record of all purchases 
A) Receiving advance notice of sales 
B) Temptation to overspend 
C) Avoiding the necessity of carrying cash 
D) Ease of returning merchandise 
E) Having a record of all purchases

Question 2

Most of the information in your credit file may be reported for only seven years.However,if you have declared personal bankruptcy,then this fact may be reported for 10 years.

Accepted Answer

A) True 
 B)False

Question 3

Which one of the following is important to do to help avoid credit card fraud?

Accepted Answer

A) Sign your card as soon as you get it 
B) Give out your credit card number over the phone 
C) Write your credit card number on the outside of envelopes 
D) Leave your credit card lying around anywhere 
E) If your billing statement is incorrect, ignore it 
A) Sign your card as soon as you get it 
B) Give out your credit card number over the phone 
C) Write your credit card number on the outside of envelopes 
D) Leave your credit card lying around anywhere 
E) If your billing statement is incorrect, ignore it

Question 4

The larger the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

Accepted Answer

A) True 
 B)False

Question 5

When did installment credit explode on the American scene?

Accepted Answer

A) With the advent of the automobile in the early 1900s 
B) With the advent of television in the late 1940s 
C) Just after World War II 
D) During the recession of the 1950s 
E) During the inflation of the 1970s 
A) With the advent of the automobile in the early 1900s 
B) With the advent of television in the late 1940s 
C) Just after World War II 
D) During the recession of the 1950s 
E) During the inflation of the 1970s

Question 6

When imposters take your name,they are committing a crime.

Accepted Answer

A) True 
 B)False

Question 7

Which federal consumer credit law prohibits credit card issuers from sending unrequested cards?

Accepted Answer

A) Truth in Lending Act 
B) Fair Credit Reporting Act 
C) Fair Credit Billing Act 
D) Equal Credit Opportunity Act 
E) Fair Debt Collection Practices Act 
A) Truth in Lending Act 
B) Fair Credit Reporting Act 
C) Fair Credit Billing Act 
D) Equal Credit Opportunity Act 
E) Fair Debt Collection Practices Act

Question 8

If you are denied credit,your first step should be to:

Accepted Answer

A) increase your income and decrease your spending. 
B) reapply for credit. 
C) hire an attorney and file a suit against the creditor. 
D) check your credit file at the credit bureau. 
E) sue the credit bureau that provided the negative information. 
A) increase your income and decrease your spending. 
B) reapply for credit. 
C) hire an attorney and file a suit against the creditor. 
D) check your credit file at the credit bureau. 
E) sue the credit bureau that provided the negative information.

Question 9

If you are a woman,a creditor must:

Accepted Answer

A) require a spouse to cosign a loan. 
B) ask about your birth control practices or family plans. 
C) consider whether you have a telephone listing in your own home. 
D) refuse individual credit in your own name. 
E) consider income from your employment. 
A) require a spouse to cosign a loan. 
B) ask about your birth control practices or family plans. 
C) consider whether you have a telephone listing in your own home. 
D) refuse individual credit in your own name. 
E) consider income from your employment.

Question 10

Although credit allows more immediate satisfaction of needs and desires,it does not increase total purchasing power.

Accepted Answer

A) True 
 B)False

Question 11

One example of closed-end credit is:

Accepted Answer

A) a credit card issued by a department store. 
B) a credit card issued by VISA or MasterCard. 
C) the use of overdraft protection at a bank. 
D) the use of a cashier's check to pay for a purchase. 
E) a mortgage loan. 
A) a credit card issued by a department store. 
B) a credit card issued by VISA or MasterCard. 
C) the use of overdraft protection at a bank. 
D) the use of a cashier's check to pay for a purchase. 
E) a mortgage loan.

Question 12

When you cosign a loan,you are being asked to guarantee this debt.

Accepted Answer

A) True 
 B)False

Question 13

The Fair Credit Billing Act has a provision in which a lender can threaten your credit rating while you are resolving a billing dispute.

Accepted Answer

A) True 
 B)False

Question 14

Consumer credit:

Accepted Answer

A) is a privilege of the affluent. 
B) dates back to colonial times. 
C) carries no finance charge. 
D) is not a major force in our economy. 
E) use has been declining in recent years. 
A) is a privilege of the affluent. 
B) dates back to colonial times. 
C) carries no finance charge. 
D) is not a major force in our economy. 
E) use has been declining in recent years.

Question 15

Which federal credit law sets the procedure for promptly correcting billing mistakes?

Accepted Answer

A) Fair Debt Collection Practices Act 
B) Equal Credit Opportunity Act 
C) Fair Credit Billing Act 
D) Fair Credit Reporting Act 
E) Truth in Lending Act 
A) Fair Debt Collection Practices Act 
B) Equal Credit Opportunity Act 
C) Fair Credit Billing Act 
D) Fair Credit Reporting Act 
E) Truth in Lending Act

Question 16

Dave's net take-home pay per month is $2,200.What is the maximum dollar amount of debt payments,excluding a home mortgage,he should have?

Accepted Answer

A) $880 
B) $440 
C) $330 
D) $220 
E) $0 
A) $880 
B) $440 
C) $330 
D) $220 
E) $0

Question 17

Paul Phillips has checked his credit report and believes there is an error in it.Which consumer protection law specifies that he has the right to have errors in his credit report investigated?

Accepted Answer

A) Fair Credit Reporting Act 
B) Fair Credit Billing Act 
C) Equal Credit Opportunity Act 
D) Fair Debt Collection Practices Act 
E) Truth in Lending Act 
A) Fair Credit Reporting Act 
B) Fair Credit Billing Act 
C) Equal Credit Opportunity Act 
D) Fair Debt Collection Practices Act 
E) Truth in Lending Act

Question 18

In the 5 Cs of credit,capacity refers to the borrower's financial ability to meet credit obligations.

Accepted Answer

A) True 
 B)False

Question 19

The borrower's financial ability to meet credit obligations is called:

Accepted Answer

A) capacity. 
B) character. 
C) capital. 
D) collateral. 
E) conditions. 
A) capacity. 
B) character. 
C) capital. 
D) collateral. 
E) conditions.

Question 20

If you have incorrect information in your credit file:

Accepted Answer

A) you can't really do much about it. 
B) you have no legal remedies. 
C) credit bureaus are not required to change it. 
D) there are legal remedies available to you. 
E) don't worry because it will not affect your ability to borrow money. 
A) you can't really do much about it. 
B) you have no legal remedies. 
C) credit bureaus are not required to change it. 
D) there are legal remedies available to you. 
E) don't worry because it will not affect your ability to borrow money.

Which one of the following is a disadvantage of using credit?

Most of the information in your credit file may be reported for only seven years.However,if you have declared personal bankruptcy,then this fact may be reported for 10 years.

Which one of the following is important to do to help avoid credit card fraud?

The larger the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

When did installment credit explode on the American scene?

When imposters take your name,they are committing a crime.

Which federal consumer credit law prohibits credit card issuers from sending unrequested cards?

If you are denied credit,your first step should be to:

If you are a woman,a creditor must:

Although credit allows more immediate satisfaction of needs and desires,it does not increase total purchasing power.

One example of closed-end credit is:

When you cosign a loan,you are being asked to guarantee this debt.

The Fair Credit Billing Act has a provision in which a lender can threaten your credit rating while you are resolving a billing dispute.

Consumer credit:

Which federal credit law sets the procedure for promptly correcting billing mistakes?

Dave's net take-home pay per month is $2,200.What is the maximum dollar amount of debt payments,excluding a home mortgage,he should have?

Paul Phillips has checked his credit report and believes there is an error in it.Which consumer protection law specifies that he has the right to have errors in his credit report investigated?

In the 5 Cs of credit,capacity refers to the borrower's financial ability to meet credit obligations.

The borrower's financial ability to meet credit obligations is called:

If you have incorrect information in your credit file:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stock

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 6: Introduction to Consumer Credit

Which one of the following is a disadvantage of using credit?

Most of the information in your credit file may be reported for only seven years.However,if you have declared personal bankruptcy,then this fact may be reported for 10 years.

Which one of the following is important to do to help avoid credit card fraud?

The larger the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

When did installment credit explode on the American scene?

When imposters take your name,they are committing a crime.

Which federal consumer credit law prohibits credit card issuers from sending unrequested cards?

If you are denied credit,your first step should be to:

If you are a woman,a creditor must:

Although credit allows more immediate satisfaction of needs and desires,it does not increase total purchasing power.

One example of closed-end credit is:

When you cosign a loan,you are being asked to guarantee this debt.

The Fair Credit Billing Act has a provision in which a lender can threaten your credit rating while you are resolving a billing dispute.

Consumer credit:

Which federal credit law sets the procedure for promptly correcting billing mistakes?

Dave's net take-home pay per month is $2,200.What is the maximum dollar amount of debt payments,excluding a home mortgage,he should have?

Paul Phillips has checked his credit report and believes there is an error in it.Which consumer protection law specifies that he has the right to have errors in his credit report investigated?

In the 5 Cs of credit,capacity refers to the borrower's financial ability to meet credit obligations.

The borrower's financial ability to meet credit obligations is called:

If you have incorrect information in your credit file:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stock

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters