Question 1

It is not difficult to find a credit card company that is eager to extend credit to you.

Accepted Answer

A) True 
 B)False  True

Question 2

Because of the short-term nature of credit card lending,the condition of the economy is not considered.

Accepted Answer

A) True 
 B)False  False

Question 3

Describe the availability of credit today for a person over 18 years of age.Do you get credit card offers in the mail and are discounts available when signing up for a proprietary credit card?

Accepted Answer

Credit is available everywhere and easy to obtain.Many stores offer a 10 percent discount on purchases just to sign up for their credit card and credit card offers through the mail are numerous.

Question 4

If you pay your total credit card amount before the grace period,you are not normally charged any interest.

Accepted Answer

A) True 
 B)False

Question 5

A credit card that can only be used in establishments of the issuer is called a(n)________ credit card.

Accepted Answer

retail or

Question 6

Prestige cards (gold or platinum cards)always charge a higher annual fee,but offer extra benefits such as free insurance on rental cars or special warranties on purchases.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following personal information should not be asked on a credit card application?

Accepted Answer

A) Stocks and bonds owned 
B) Income of parents 
C) Employment history 
D) Expenses and commitments 
A) Stocks and bonds owned 
B) Income of parents 
C) Employment history 
D) Expenses and commitments

Question 8

One advantage of credit cards is that you can receive free financing if you pay off your balance each month.

Accepted Answer

A) True 
 B)False

Question 9

If you find yourself with an excessive credit card balance,the first thing you should do is

Accepted Answer

A) borrow funds from family members. 
B) quit school and get a job. 
C) spend as little as possible. 
D) file for personal bankruptcy. 
A) borrow funds from family members. 
B) quit school and get a job. 
C) spend as little as possible. 
D) file for personal bankruptcy.

Question 10

All of the following are disadvantages of having proprietary credit cards except

Accepted Answer

A) your purchases are limited to a single merchant per card. 
B) you may need several credit cards. 
C) you receive several billing statements. 
D) it takes considerable time to process your application to allow you to begin obtaining credit. 
A) your purchases are limited to a single merchant per card. 
B) you may need several credit cards. 
C) you receive several billing statements. 
D) it takes considerable time to process your application to allow you to begin obtaining credit.

Question 11

Which of the following is not a method for computing interest on credit cards?

Accepted Answer

A) Previous balance method 
B) Average daily balance method 
C) Present value of future payment method 
D) Adjusted balance method 
A) Previous balance method 
B) Average daily balance method 
C) Present value of future payment method 
D) Adjusted balance method

Question 12

On your credit card statement,the amount that you owe the financial institution now is called the

Accepted Answer

A) previous balance. 
B) minimum payment. 
C) new balance. 
D) payments. 
A) previous balance. 
B) minimum payment. 
C) new balance. 
D) payments.

Question 13

MasterCard and Visa are not accepted by gas stations such as Shell,which issue their own credit cards.

Accepted Answer

A) True 
 B)False

Question 14

In applying for a credit card,the potential creditor will look at which of the following as a source of future debt payments if necessary?

Accepted Answer

A) Cash outflows 
B) Credit history 
C) Potential inheritances 
D) Balances in savings accounts 
A) Cash outflows 
B) Credit history 
C) Potential inheritances 
D) Balances in savings accounts

Question 15

An alternative to MasterCard,Visa,and American Express credit cards is a retail or proprietary card that is issued for use at a specific retail establishment.

Accepted Answer

A) True 
 B)False

Question 16

A credit card whose interest rate changes as a specific market interest rate changes is said to have a

Accepted Answer

A) variable rate. 
B) fixed rate. 
C) constant rate. 
D) tiered rate. 
A) variable rate. 
B) fixed rate. 
C) constant rate. 
D) tiered rate.

Question 17

One advantage of using a credit card is that you receive a list of your purchases,which enables you to keep track of your spending.

Accepted Answer

A) True 
 B)False

Question 18

Credit has its advantages and disadvantages.Which of the following is false?

Accepted Answer

A) Credit cards should be used with discipline. 
B) You should spend up to the limit on all your credit cards. 
C) Cash advances are available through a credit card. 
D) Bankruptcy is the worst-case scenario from poor credit management. 
A) Credit cards should be used with discipline. 
B) You should spend up to the limit on all your credit cards. 
C) Cash advances are available through a credit card. 
D) Bankruptcy is the worst-case scenario from poor credit management.

Question 19

APR means

Accepted Answer

A) actual percentage rate. 
B) applied percentage rate. 
C) annual percentage rate. 
D) all-banks percentage rate. 
A) actual percentage rate. 
B) applied percentage rate. 
C) annual percentage rate. 
D) all-banks percentage rate.

Question 20

Discuss how many credit cards you think you should have and why.

Accepted Answer

Subjective answer ranging from

Exam 8: Managing Your Credit

It is not difficult to find a credit card company that is eager to extend credit to you.

Because of the short-term nature of credit card lending,the condition of the economy is not considered.

Describe the availability of credit today for a person over 18 years of age.Do you get credit card offers in the mail and are discounts available when signing up for a proprietary credit card?

If you pay your total credit card amount before the grace period,you are not normally charged any interest.

A credit card that can only be used in establishments of the issuer is called a(n)________ credit card.

Prestige cards (gold or platinum cards)always charge a higher annual fee,but offer extra benefits such as free insurance on rental cars or special warranties on purchases.

Which of the following personal information should not be asked on a credit card application?

One advantage of credit cards is that you can receive free financing if you pay off your balance each month.

If you find yourself with an excessive credit card balance,the first thing you should do is

All of the following are disadvantages of having proprietary credit cards except

Which of the following is not a method for computing interest on credit cards?

On your credit card statement,the amount that you owe the financial institution now is called the

MasterCard and Visa are not accepted by gas stations such as Shell,which issue their own credit cards.

In applying for a credit card,the potential creditor will look at which of the following as a source of future debt payments if necessary?

An alternative to MasterCard,Visa,and American Express credit cards is a retail or proprietary card that is issued for use at a specific retail establishment.

A credit card whose interest rate changes as a specific market interest rate changes is said to have a

One advantage of using a credit card is that you receive a list of your purchases,which enables you to keep track of your spending.

Credit has its advantages and disadvantages.Which of the following is false?

APR means

Discuss how many credit cards you think you should have and why.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters