Question 1

All of the following are true of prestige credit cards except they

Accepted Answer

A)  have a longer grace period than other cards. 
B)  may have substantially higher fees. 
C)  provide extra benefits to cardholders. 
D)  are given to individuals who have an exceptional credit standing. 
A)  have a longer grace period than other cards. 
B)  may have substantially higher fees. 
C)  provide extra benefits to cardholders. 
D)  are given to individuals who have an exceptional credit standing.

Question 2

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 3

Even if you cannot pay your credit card bill in full,you should still attempt to pay as much as possible so that you can minimize finance charges.

Accepted Answer

A) True 
 B)False

Question 4

When using your credit card frequently,it is wise to

Accepted Answer

A)  pay off the balance every month. 
B)  make only the minimum payment to conserve cash. 
C)  use the card that offers the most points regardless of other provisions. 
D)  Both A and C are correct. 
A)  pay off the balance every month. 
B)  make only the minimum payment to conserve cash. 
C)  use the card that offers the most points regardless of other provisions. 
D)  Both A and C are correct.

Question 5

Use the following two columns of items to answer the matching questions below:
-proprietary credit card

Accepted Answer

A) time allowed without interest before the payment is due 
B) allows you to make purchases beyond your stated credit limit for a fee 
C) credit card good only with a particular merchant 
D) the maximum amount allowed to charge 
E) a card that allows for purchases to be paid for at a later date
F)cards that offer extra benefits and are available to persons with high incomes and exceptional credit histories
G)cash borrowed on a credit card 
A) time allowed without interest before the payment is due 
B) allows you to make purchases beyond your stated credit limit for a fee 
C) credit card good only with a particular merchant 
D) the maximum amount allowed to charge 
E) a card that allows for purchases to be paid for at a later date
F)cards that offer extra benefits and are available to persons with high incomes and exceptional credit histories
G)cash borrowed on a credit card

Question 6

There is no cost to the merchant when you use a MasterCard or Visa credit card.

Accepted Answer

A) True 
 B)False

Question 7

The interest charged on purchases and cash advances on credit cards is computed in the same way.

Accepted Answer

A) True 
 B)False

Question 8

Describe how credit cards affect your personal budget,income statement,and balance sheet.Has credit allowed you to expand your purchases?

Accepted Answer

This is a subjective answer.Interest exp

Question 9

Use the following two columns of items to answer the matching questions below:
-cash advance

Accepted Answer

A) time allowed without interest before the payment is due 
B) allows you to make purchases beyond your stated credit limit for a fee 
C) credit card good only with a particular merchant 
D) the maximum amount allowed to charge 
E) a card that allows for purchases to be paid for at a later date
F)cards that offer extra benefits and are available to persons with high incomes and exceptional credit histories
G)cash borrowed on a credit card 
A) time allowed without interest before the payment is due 
B) allows you to make purchases beyond your stated credit limit for a fee 
C) credit card good only with a particular merchant 
D) the maximum amount allowed to charge 
E) a card that allows for purchases to be paid for at a later date
F)cards that offer extra benefits and are available to persons with high incomes and exceptional credit histories
G)cash borrowed on a credit card

Question 10

For good financial management,you should treat a credit card as

Accepted Answer

A)  a source of funds. 
B)  a means of convenience. 
C)  a way to finance everything. 
D)  an inexpensive form of financing. 
A)  a source of funds. 
B)  a means of convenience. 
C)  a way to finance everything. 
D)  an inexpensive form of financing.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Use the following two columns of items to answer the matching questions below:
-credit limit

Accepted Answer

A) time allowed without interest before the payment is due 
B) allows you to make purchases beyond your stated credit limit for a fee 
C) credit card good only with a particular merchant 
D) the maximum amount allowed to charge 
E) a card that allows for purchases to be paid for at a later date
F)cards that offer extra benefits and are available to persons with high incomes and exceptional credit histories
G)cash borrowed on a credit card 
A) time allowed without interest before the payment is due 
B) allows you to make purchases beyond your stated credit limit for a fee 
C) credit card good only with a particular merchant 
D) the maximum amount allowed to charge 
E) a card that allows for purchases to be paid for at a later date
F)cards that offer extra benefits and are available to persons with high incomes and exceptional credit histories
G)cash borrowed on a credit card

Question 13

Which of the following statements is true about bank credit cards like VISA and MasterCard?

Accepted Answer

A)  They are an excellent source of emergency funds for unexpected expenses. 
B)  Their interest rate is generally lower than a loan at a credit union. 
C)  Like home equity loans, the interest paid on credit cards is tax deductible. 
D)  Their interest rate is lower than home equity lines of credit. 
A)  They are an excellent source of emergency funds for unexpected expenses. 
B)  Their interest rate is generally lower than a loan at a credit union. 
C)  Like home equity loans, the interest paid on credit cards is tax deductible. 
D)  Their interest rate is lower than home equity lines of credit.

Question 14

As of November 14,Ben has an outstanding credit card balance of $1,100 from purchases made over the past month.The new billing period begins on November 15.Assume Ben's outstanding balance for the first 15 days of this new billing period (Nov.15-29)is $1,100.Then on November 29,the financial institution receives a payment of $600 from Ben,reducing his balance to $500.This is the balance for the remaining 15 days. Using the adjusted balance method and a monthly interest rate of 2.5%,Ben's finance charge would be

Accepted Answer

A)  $15.00. 
B)  $12.50. 
C)  $27.50. 
D)  $20.00. 
A)  $15.00. 
B)  $12.50. 
C)  $27.50. 
D)  $20.00.

Question 15

Bill borrowed $3,600 and will be charged a simple interest rate of 18%.Bill will pay ________ interest for borrowing the money on April 1 and repaying the money on December 31.

Accepted Answer

A)  $468 
B)  $648 
C)  $486 
D)  $162 
A)  $468 
B)  $648 
C)  $486 
D)  $162

Question 16

All of the following are true of the grace period on credit cards except it

Accepted Answer

A)  is usually about 20 days. 
B)  applies only to cash advances. 
C)  is the time in between the time the statement is "closed" and the time the payment is due. 
D)  amounts to free credit time. 
A)  is usually about 20 days. 
B)  applies only to cash advances. 
C)  is the time in between the time the statement is "closed" and the time the payment is due. 
D)  amounts to free credit time.

Question 17

Congress has passed regulations that protect consumers who use credit card services.

Accepted Answer

A) True 
 B)False

Question 18

The previous balance method takes into account the time that you pay off any part of the outstanding balance.

Accepted Answer

A) True 
 B)False

Question 19

Use the following two columns of items to answer the matching questions below:
-grace period

Accepted Answer

A) time allowed without interest before the payment is due 
B) allows you to make purchases beyond your stated credit limit for a fee 
C) credit card good only with a particular merchant 
D) the maximum amount allowed to charge 
E) a card that allows for purchases to be paid for at a later date
F)cards that offer extra benefits and are available to persons with high incomes and exceptional credit histories
G)cash borrowed on a credit card 
A) time allowed without interest before the payment is due 
B) allows you to make purchases beyond your stated credit limit for a fee 
C) credit card good only with a particular merchant 
D) the maximum amount allowed to charge 
E) a card that allows for purchases to be paid for at a later date
F)cards that offer extra benefits and are available to persons with high incomes and exceptional credit histories
G)cash borrowed on a credit card

Question 20

Compute the new balance on a credit card assuming that: ∙ Beginning balance = $450
∙ Purchases during the month = $300
∙ Payments made within the grace period = $250
∙ Interest rate = 18%

Accepted Answer

A)  $550 
B)  $503 
C)  $516 
D)  $1,000 
A)  $550 
B)  $503 
C)  $516 
D)  $1,000

All of the following are true of prestige credit cards except they

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

Even if you cannot pay your credit card bill in full,you should still attempt to pay as much as possible so that you can minimize finance charges.

When using your credit card frequently,it is wise to

Use the following two columns of items to answer the matching questions below: -proprietary credit card

There is no cost to the merchant when you use a MasterCard or Visa credit card.

The interest charged on purchases and cash advances on credit cards is computed in the same way.

Describe how credit cards affect your personal budget,income statement,and balance sheet.Has credit allowed you to expand your purchases?

Use the following two columns of items to answer the matching questions below: -cash advance

For good financial management,you should treat a credit card as

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

Use the following two columns of items to answer the matching questions below: -credit limit

Which of the following statements is true about bank credit cards like VISA and MasterCard?

Bill borrowed $3,600 and will be charged a simple interest rate of 18%.Bill will pay ________ interest for borrowing the money on April 1 and repaying the money on December 31.

All of the following are true of the grace period on credit cards except it

Congress has passed regulations that protect consumers who use credit card services.

The previous balance method takes into account the time that you pay off any part of the outstanding balance.

Use the following two columns of items to answer the matching questions below: -grace period

Compute the new balance on a credit card assuming that: ∙ Beginning balance = $450 ∙ Purchases during the month = $300 ∙ Payments made within the grace period = $250 ∙ Interest rate = 18%

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

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Exam 8: Managing Your Credit

All of the following are true of prestige credit cards except they

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

Even if you cannot pay your credit card bill in full,you should still attempt to pay as much as possible so that you can minimize finance charges.

When using your credit card frequently,it is wise to

Use the following two columns of items to answer the matching questions below: -proprietary credit card

There is no cost to the merchant when you use a MasterCard or Visa credit card.

The interest charged on purchases and cash advances on credit cards is computed in the same way.

Describe how credit cards affect your personal budget,income statement,and balance sheet.Has credit allowed you to expand your purchases?

Use the following two columns of items to answer the matching questions below: -cash advance

For good financial management,you should treat a credit card as

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

Use the following two columns of items to answer the matching questions below: -credit limit

Which of the following statements is true about bank credit cards like VISA and MasterCard?

Bill borrowed $3,600 and will be charged a simple interest rate of 18%.Bill will pay ________ interest for borrowing the money on April 1 and repaying the money on December 31.

All of the following are true of the grace period on credit cards except it

Congress has passed regulations that protect consumers who use credit card services.

The previous balance method takes into account the time that you pay off any part of the outstanding balance.

Use the following two columns of items to answer the matching questions below: -grace period

Compute the new balance on a credit card assuming that: ∙ Beginning balance = $450 ∙ Purchases during the month = $300 ∙ Payments made within the grace period = $250 ∙ Interest rate = 18%

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