Question 1

If creditors give you no credit for payments made during the billing period,then this is called the:

Accepted Answer

A)  APR method.
B)  discount method.
C)  previous balance method.
D)  adjusted balance method.
E)  average daily balance method.

Question 2

Two key concepts that you should remember when borrowing are the finance charge and the annual percentage rate.

Accepted Answer

A) True 
 B)False

Question 3

Jeff Bloom wants to have a house just like the one his parents had when he was a teenager.He finds the house he wants and gets an interest-only loan on it for the first five years.Which one of the following best explains Jeff's spending,which can lead to overindebtedness?

Accepted Answer

A)  Misunderstanding or lack of communication
B)  The use of money to punish
C)  The expectation of instant comfort
D)  Keeping up with the Joneses
E)  Overindulgence of children

Question 4

The total dollar amount you pay to use credit is called the:

Accepted Answer

A)  finance charge.
B)  annual percentage rate.
C)  price of the good/service purchased.
D)  amortized rebate.
E)  interest rate.

Question 5

An increasing number of bankruptcy filers are well-educated,middle-class people.

Accepted Answer

A) True 
 B)False

Question 6

Your bank card has an APR of 21% and there is a 3% fee for cash advances.The bank starts charging interest on cash advances immediately.You get a cash advance of $500 on the first day of the month.You get your credit card bill at the end of the month.What is the approximate total finance charge you will pay on this cash advance for the month? Assume each month has 30 days.

Accepted Answer

A)  $15
B)  $21
C)  $24
D)  $0
E)  $3

Question 7

Credit unions offer loans with a single repayment schedule to non-members.

Accepted Answer

A) True 
 B)False

Question 8

Chuck Spencer wants to borrow money for six years to purchase a new car.He has been offered a seven percent fixed rate loan and also a variable rate loan that has an initial rate of five percent.By choosing the variable rate loan,Chuck is reducing the lender's risk by:

Accepted Answer

A)  sharing the interest rate risk.
B)  increasing his monthly payments.
C)  taking a higher stake in the asset he is purchasing.
D)  repaying the loan over a faster period of time.
E)  pledging collateral.

Question 9

In open-end credit,what are the various systems creditors use to calculate the balance on which they assess finance charges?

Accepted Answer

Creditors use the following methods to c...

Question 10

Sarah Parker goes out with the girls for a night on the town and gets home late,waking everyone in the house.In response,her husband Jerry goes out the next day and spends $500 on new shoes for himself,putting it all on a credit card.Which one of the following causes of overindebtedness best explains Jerry's spending?

Accepted Answer

A)  Misunderstanding or lack of communication
B)  The use of money to punish
C)  The expectation of instant comfort
D)  Keeping up with the Joneses
E)  Overindulgence of children

Question 11

The CCCS sometimes charges a nominal fee if it:

Accepted Answer

A)  administers a debt repayment plan.
B)  helps families manage their debts better.
C)  sets up a realistic budget for them.
D)  provides credit education.
E)  contacts creditors.

Question 12

The Consumer Credit Counseling Service is affiliated with the:

Accepted Answer

A)  National Foundation for Consumer Credit.
B)  Federal Trade Commission.
C)  Better Business Bureau.
D)  U) S.Consumer Protection Agency.
E)  Federal Reserve Banks.

Question 13

According to Fair Isaac Corporation (FICO) ,a personal bankruptcy can cause an immediate drop in your credit score of how many points?

Accepted Answer

A)  100
B)  150
C)  180
D)  210
E)  260

Question 14

Mature consumers have certain information and:

Accepted Answer

A)  They demonstrate self-discipline.
B)  They control their impulses and use sound judgment.
C)  They accept responsibility for money management.
D)  They are able to postpone expenditures when needed.
E)  All of these

Question 15

Which of the following institutions is generally sympathetic to borrowers with legitimate payment problems?

Accepted Answer

A)  Credit union
B)  Payday advance company
C)  Finance company
D)  Department store
E)  Commercial bank

Question 16

In a Chapter 7 bankruptcy,which of the following debts may be excluded from discharge?

Accepted Answer

A)  Debts arising from fraud
B)  Debts arising from embezzlement
C)  Debts arising from driving while intoxicated
D)  Debts arising from larceny
E)  All of these

Question 17

Before deciding to borrow money,you should ask yourself:

Accepted Answer

A)  Do I need a loan?
B)  Can I afford a loan?
C)  Can I qualify for a loan?
D)  All of these
E)  None of these

Question 18

Steve Black has two children.He is buying each of them their own TV to put in their rooms so they do not have to join the rest of the family and watch TV together.Which one of the following best explains Gary's spending,which can lead to overindebtedness?

Accepted Answer

A)  Misunderstanding or lack of communication
B)  The use of money to punish
C)  The expectation of instant comfort
D)  Keeping up with the Joneses
E)  Overindulgence of children

Question 19

Which type of credit insurance repays your loan in the event of a loss of income due to illness or injury?

Accepted Answer

A)  Credit life insurance
B)  Credit accident and health insurance
C)  Credit property insurance
D)  Credit casualty insurance
E)  Credit inability insurance

Question 20

The finance charge may include which of the following:

Accepted Answer

A)  Interest costs
B)  Service charges
C)  Credit-related insurance premiums
D)  Appraisal fees
E)  All of these

Exam 7: Choosing a Source of Credit: the Costs of Credit Alternatives

In open-end credit,what are the various systems creditors use to calculate the balance on which they assess finance charges?

Correct Answer
verified
Creditors use the following methods to c...
View Answer

Before deciding to borrow money,you should ask yourself:

Correct Answer
verified

An increasing number of bankruptcy filers are well-educated,middle-class people.

Correct Answer
verified

The finance charge may include which of the following:

Correct Answer
verified

Mature consumers have certain information and:

Correct Answer
verified

Correct Answer
verified

According to Fair Isaac Corporation (FICO) ,a personal bankruptcy can cause an immediate drop in your credit score of how many points?

Correct Answer
verified

Chuck Spencer wants to borrow money for six years to purchase a new car.He has been offered a seven percent fixed rate loan and also a variable rate loan that has an initial rate of five percent.By choosing the variable rate loan,Chuck is reducing the lender's risk by:

Correct Answer
verified

Jeff Bloom wants to have a house just like the one his parents had when he was a teenager.He finds the house he wants and gets an interest-only loan on it for the first five years.Which one of the following best explains Jeff's spending,which can lead to overindebtedness?

Correct Answer
verified

The CCCS sometimes charges a nominal fee if it:

Correct Answer
verified

Steve Black has two children.He is buying each of them their own TV to put in their rooms so they do not have to join the rest of the family and watch TV together.Which one of the following best explains Gary's spending,which can lead to overindebtedness?

Correct Answer
verified

Two key concepts that you should remember when borrowing are the finance charge and the annual percentage rate.

Correct Answer
verified

In a Chapter 7 bankruptcy,which of the following debts may be excluded from discharge?

Correct Answer
verified

The Consumer Credit Counseling Service is affiliated with the:

Correct Answer
verified

Which type of credit insurance repays your loan in the event of a loss of income due to illness or injury?

Correct Answer
verified

Correct Answer
verified

Which of the following institutions is generally sympathetic to borrowers with legitimate payment problems?

Correct Answer
verified

Credit unions offer loans with a single repayment schedule to non-members.

Correct Answer
verified

The total dollar amount you pay to use credit is called the:

Correct Answer
verified

If creditors give you no credit for payments made during the billing period,then this is called the:

Correct Answer
verified

Exam 7: Choosing a Source of Credit: the Costs of Credit Alternatives

In open-end credit,what are the various systems creditors use to calculate the balance on which they assess finance charges?

Correct AnswerverifiedCreditors use the following methods to c...View AnswerShow Answer

Before deciding to borrow money,you should ask yourself:

Correct AnswerverifiedShow Answer

An increasing number of bankruptcy filers are well-educated,middle-class people.

Correct AnswerverifiedShow Answer

The finance charge may include which of the following:

Correct AnswerverifiedShow Answer

Mature consumers have certain information and:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

According to Fair Isaac Corporation (FICO) ,a personal bankruptcy can cause an immediate drop in your credit score of how many points?

Correct AnswerverifiedShow Answer

Chuck Spencer wants to borrow money for six years to purchase a new car.He has been offered a seven percent fixed rate loan and also a variable rate loan that has an initial rate of five percent.By choosing the variable rate loan,Chuck is reducing the lender's risk by:

Correct AnswerverifiedShow Answer

Jeff Bloom wants to have a house just like the one his parents had when he was a teenager.He finds the house he wants and gets an interest-only loan on it for the first five years.Which one of the following best explains Jeff's spending,which can lead to overindebtedness?

Correct AnswerverifiedShow Answer

The CCCS sometimes charges a nominal fee if it:

Correct AnswerverifiedShow Answer

Steve Black has two children.He is buying each of them their own TV to put in their rooms so they do not have to join the rest of the family and watch TV together.Which one of the following best explains Gary's spending,which can lead to overindebtedness?

Correct AnswerverifiedShow Answer

Two key concepts that you should remember when borrowing are the finance charge and the annual percentage rate.

Correct AnswerverifiedShow Answer

In a Chapter 7 bankruptcy,which of the following debts may be excluded from discharge?

Correct AnswerverifiedShow Answer

The Consumer Credit Counseling Service is affiliated with the:

Correct AnswerverifiedShow Answer

Which type of credit insurance repays your loan in the event of a loss of income due to illness or injury?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following institutions is generally sympathetic to borrowers with legitimate payment problems?

Correct AnswerverifiedShow Answer

Credit unions offer loans with a single repayment schedule to non-members.

Correct AnswerverifiedShow Answer

The total dollar amount you pay to use credit is called the:

Correct AnswerverifiedShow Answer

If creditors give you no credit for payments made during the billing period,then this is called the:

Correct AnswerverifiedShow Answer

Correct Answer
verified
Creditors use the following methods to c...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified