personal finance chapter 6

Which of the following cards is issued as a form of credit by department stores and oil companies?

A retail charge card

_____ cards offer the cardholder a way to contribute to a worthy cause and are sometimes described as "credit cards with a cause."

Affinity

Which of the following will lead to a poor credit rating?

Applying for a long-term loan and occasionally being late with a payment

_____ is a benefit of using credit cards.

Being able to meet a financial emergency

Which of the following is an improper use of credit?

Buying a short-lived good

Personal insolvency can be legally satisfied by:

Chapter 13 of the Bankruptcy Code

Which of the following is a preferred use of a credit card?

Occasionally for convenience

A(n) _____ is an agency that provides credit information about individual borrowers to lenders.

credit bureau

Most creditors ____________ if you are having difficulty meeting your payments.

will work out a solution

If your monthly before-tax income is $2,000 and your monthly take-home pay is $1,500, your maximum monthly consumer credit payments should not exceed:

$300

As a percent of take-home pay, monthly consumer credit payments should not exceed _____.

20%

Which of the following is true about phishing?

Pretending to be an employee of a financial institution

Which of the following is the correct expression for calculating the debt safety ratio?

Total monthly consumer credit payments / Monthly take-home pay

If a borrower has a high credit score, then there is ____________.

a high chance of his or her loan getting approved

A straight bankruptcy _____.

allows a debtor to retain some other personal assets as per federal regulations

A credit scoring system might assign points according to your age and ____________.

annual income

Chapter 7 of the bankruptcy code:

eliminates most of the financial obligations of the borrower.

To establish creditworthiness and to have a good credit score, one should probably first:

open savings and checking accounts.

Persons with very poor credit ratings can still get _____ credit cards.

secured

With a bank credit card, one can often avoid interest charges if:

the account balance is paid in full every month.