FINANCIAL CHAP 5
consumer credit
dates back to colonial times
which of the following electronically subtracts money fro your savings or checking account to pay for goods and services
debit cards
home equity loans should be used for
major expenses such as home impoverishments or education
when calculating the debt-to-equity ratio, the following is NOT included
mortgage balance
which of the following is often considered to offer the LEAST expensive loans (loans with low interest rate)
parents or family members
which of the following is NOT a valid reason for borrowing?
paying for everyday living expenses
a cash advance
requires you to pay interest every day until you repay the cash advance
if you have probably reached the upper limit of debt obligations, your debt-to-equity ratio is about
1.
Information about a personal bankruptcy may be reported in you're credit file for
10 years
Experts suggest that the debt payments-to-income ratio should be a maximum of
20%
A typical grace period offered by many credit card issuers is
20-25 days
which of the following can result from a failure to repay a loan?
All of the above may result from the failure to repay a loan
A credit card holder who pays the full balance during the grace period each month is actually getting a free loan from the credit card company.
a convenience user
which of the following is NOT associated with credit cards?
a debit to your checking account
which of the following is an example of open-end credit
a department store credit card
which of the following is an example of closed-end credit?
a mortgage loan
a prearranged loan for a specific amount that a consumer can use by writing a special check is known as
a revolving check credit
Before taking out a loan, you should ask yourself whether you can meet all of your essential expenses and still afford the monthly loan payments. This can be determined by
adding up basic monthly expenses and subtracting.......etc
When misused, credit can result in
all of the above
which of the following questions is not needed before deciding how and when to make a major purchase?
all of the above
the equal credit opportunity act (ECOA) prohibits a lender from discriminating based on
all of these are prohibited
which of the following is a valid reason for using credit
all of these are valid
A direct loan for personal purposes, home improvements, or vacation expenses is called
an installment cash credit
installment credit, in which the debt is repaid in equal installments over a specified period of time, exploded on the American scene with the advent of the
automobile
A loan officer is examining your income and the amount of your existing debt payments in deciding whether to make a loan to you today. Which aspect of the 5Cs of lending is loan officer most likely looking at?
capacity
the question "what are your assets and net worth?" relates to
capital
The question "will you repay the loan?" relates to
character
Molly purchased a $1,500 dishwasher from Best Appliances. She will make 12 equal payments over the next year to pay for it. She is using
close-end credit
the use of property or savings to secure a loan relates to
collateral
home equity loans
have interest that is tax-deductible
If you miss payments on a home equity loan, you can lose your
house
credit reports can be obtained for all of the following reasons except
inquiry by a neighbor
the periodic charge for the use of credit is called
interest
A loan that must be repaid in total on a specified day, usually within 30 to 90 days, is A. A credit card. B. An installment cash credit. C. A bank line of credit. D. Open-end credit. E. Single lump-sum credit.
single lump-sum credit
perhaps the greatest disadvantage of using credit is
temptation to overspenddddddddddddddd @ ME
a line of credit is
the maximum dollar amount of the credit the lender has made available to a borrower
Bankruptcy courts treat gift cards
the same way they handle unsecured debt
mant people expect
their income to increase to make it easier to pay.....
which of the following is not correct
using credit can increase the amount of money that will be available to spend in the future
which of the following is not correct
using credit cards typically provides a "FLOAT" of up to 10 days
which of the following is the best scoring technique used in credit applications for consumers with limited credit histories?
vantagescore
Before buying goods and services on credit, a consumer should consider all of the following except
whether the good or service will be worth more because it was purchased with credit instead of cash
which of the following is the only online source authorized to provide you with a free copy of your credit report annually?
www.annualcreditREPORT.com
