FCS 340 Test Two

Many think that perhaps the greatest disadvantage of using credit is

overspending

Ed needed some quick cash, so he received a short term loan based on the value of an old ring. Where did he go?

pawnshop

Which of the financial services will likely provide the most expensive access to funds?

payday loan

What information does a credit report include?

personal identification information, credit information, number and type of accounts you have, and whether you pay your bills on time

Earnings on savings can be measured by the

rate of return

The minimum monthly payment on a credit card is the _________ amount you can pay and remain a borrower in ________.

smallest, good standing

A certificate of deposit that has different interest levels based on the stock market performance is called a

stock index cd

The Truth in Savings Act requires financial institutions to disclose what?

the annual percentage yield on savings accounts

What does the term negative equity mean?

the value of your car is less than the amount you owe

How do you calculate the debt-to-equity ratio? What loans are not to be included?

total liabilities/net worth

What does the Consumer Credit Counseling Service do?

try to help families get out of debt (free; nonprofit)

Impulse shopping

unplanned purchasing

Unit pricing

uses a standard unit of measurement to compare the prices of packages of different sizes

What is a stop-payment order? When do you use it?

when you ask the bank to stop payment on a check because you might have lost it

Name the only online source authorized to provide a free credit report each year at your request.

www.annualcreditreport.com

Information about a personal bankruptcy may be reported in your credit file for

10 years

Experts suggest that the debt payments-to-income ratio should be a maximum of

20%

FICO scores generally range from

350-850

List disadvantages of a car lease

> You have no ownership interest > You must meet requirements similar to qualifying for credit > Additional costs may be incurred for extra mileage, certain repairs, turning the car in early, or even a move to another state

When you select a financial services provider, what are major factors to consider?

> will I be able to borrow money? > where can I get the best return on my savings

What steps can you take if your credit application is denied?

Find out why you were denied by contacting a credit bureau

Where can you get the least expensive loan

From parents or family

What does the term "convenience user" mean as it pertains to credit?

cardholders who pay off their balances in full each month

Adjusted Checkbook Balance

checkbook balance - ATM fee + Interest

What type of institution is most likely to provide a full range of financial services, including checking, savings, and lending?

commercial bank

Comparison shopping

comparing two prices or brands to decide which is the better option

Earning interest on interest

compounding

What is the largest fixed expense associated with a new automobile

depreciation

The insurance coverage provided by the FDIC for a savings account is

$250,000 per depositer

If you lose your debit card and notify your financial institution within two days, how much are you potentially liable for?

$50

Name the three credit bureaus

Equifax Experian TransUnion

Personal bankruptcy can be filed under which section of the US bankruptcy code?

Chapter 7

What does the term liquidity mean?

allows you to withdraw your money on short notice without a loss of value or fees

The APR is the percentage cost of credit on an ______ basis.

annual

If you miss payments on a home equity loan, you can lose your

house

The periodic charge for the use of credit is called

interest

If you double the monthly payment for a credit card, the loan will be paid off in ____ time halt the time.

less

What would be considered a drawback of a savings account?

low interest rate