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