Ch. 5 Quiz

The Equal Credit Opportunity Act (ECOA) prohibits a lender from discriminating based on: Race. Nationality. Age. Sex. All of these are prohibited.

All of these are prohibited.

Which of the following questions is NOT needed before deciding how and when to make a major purchase? Do I have the cash I need for the down payment? Does the purchase fit my budget? Could I postpone the purchase? Could I use the credit I need for this purchase in some better way? All of these questions should be considered.

All of these questions should be considered.

Personal bankruptcy can be filed under which section(s) of the U.S. bankruptcy code? Chapter 7 Incorrect Chapter 11 Chapter 13 Chapters 7 and 13 Chapters 11 and 13

Chapters 7 and 13

A typical grace period offered by many credit card issuers is: 0-10 days. 10-20 days. 20-25 days. 30-40 days. 45-60 days.

20-25 days.

Which of the following electronically subtracts money from your savings or checking account to pay for goods and services? A credit card Closed-end credit A debit card Correct A gift card A home equity loan

A debit card

Which of the following is NOT associated with credit cards? A grace period A finance charge An annual fee Convenience users and borrowers A debit to your checking account

A debit to your checking account

If you think your identity has been stolen, which of the following actions does the Federal Trade Commission recommend you take immediately? Report it to your neighbor Call 911 Contact your local bank File a police report Contact your employer

File a police report

The periodic charge for the use of credit is called:

Interest

Which of the following items should be shredded to protect yourself from identity theft? Magazines Papers with personal information Envelopes Campaign mail Newspaper ads

Papers with personal information

Which of the following is often considered to offer the least expensive loans (i.e., loans with low interest)? Banks Finance companies Loan companies Parents or family members Savings and loan associations

Parents or family members

All of the following are consumer credit protection laws except: The Truth in Lending and Consumer Leasing Acts. The Equal Credit Opportunity Act. The Fair Credit Billing Act. The Credit Lawsuit Act. The Consumer Credit Reporting Reform Act.

The Credit Lawsuit Act.

Who is responsible for a loan repayment?

The cosigner and/or the borrower

The APR is the percentage cost of credit on a(n) ______________ basis.

annual

A credit card holder who pays off his balances in full each month is known as:

A convenience user

A direct loan for personal purposes, home improvements, or vacation expenses is called:

An installment cash credit.

Consumer credit: Is only a privilege of the affluent. Dates back to colonial times. Has been declining since the 1900s. Is not a major force in our economy. Is currently only used by farmers.

Dates back to colonial times.