Personal Fiance Exam 2 Questions

True or false: In most cases, it is less expensive to borrow money using your certificate of deposit as collateral for a loan than if you use your used car. True false question.

True Reason: Correct. The interest rate is almost always lower when financial assets are used to secure a loan.

Rank the following items in the order they should be completed to dispute a billing error.

Write a letter of complaint. Purchase placed in dispute. Receive an acknowledgment from the credit company. Purchase removed or credit issued to account.

It is said that the least expensive way to borrow is when you borrow on the value of a financial asset. Which of the following loans would meet that test?

certificate of deposit loan life insurance cash surrender value loan

The pros and cons of T&E credit cards, such as American Express, include:

full payment is due each month. annual fees are typically high. no finance charge is incurred as full payment of the balance owed is due each month.

Finance charge

interest + service charge

Long-term financing is more costly than short-term financing because of higher?

interest costs

The rule of 78s formula favors

lenders

Family members may only charge interest they would have earned on the money if they had deposited it in a

passbook account

The major provisions of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009:

state that a teaser rate must be good for at least six months set a consistent due date for each month limits the issuer's ability to increase the interest rate in the first year

Installment loans are a cheaper alternative to credit cards because:

their interest rates are often lower than credit card rates. they are cheaper over many months or years when an extended payment period is needed.

Security features currently being added to credit cards to deter counterfeiting include:

ultraviolet ink on the company logo. a holograph that changes color and image.

Which of the following best explains why credit cards are more dangerous than installment loans? Multiple choice question.

A credit card is easier to use than taking out an installment loan.

Family loans

Family loans can be complicated, and steps should be taken to put family loan terms in writing.