PF SB 5
if you _____ a loan and the borrower does not pay the debt, you may have to pay up to the full amount of the debt as well as any late fees.
cosign
If you cannot make a payment on a debt when due, contact the ______ at once to work out a modified payment plan.
creditor, lender, bank, company, or creditors
The Fair Credit Billing Act's underlining purpose is:
to protect consumer credit ratings
When making online purchases, you should:
use a secure browser, keep a record of the purchase, and review your statement.
What would be the interest cost (simple interest) for a $3,000 loan with a 8% rate for nine months of a year?
$180 Reason: Simple interest=Principal X Rate X Time. In this case, time is 9/12 (for 0.75 of a year).
If you borrow $200 and it cost you $22 in interest with a service charge of $5, what is the finance charge?
$27 Reason: $22 + $5 = $27
If you borrow $200 and it cost you $27 in interest with a service charge of $6, what is the finance charge?
$33 Reason: $27 + $6 = $33
What would be the interest cost (simple interest) for a $2,000 loan with a 6% rate for a half of a year?
$60 Reason: Simple interest=Principal X Rate X Time. In this case, time is 0.5 (for one-half of a year).
What are the best reasons to maintain good credit history?
- You will have a good FICO score. - You are less likely to be denied credit.
A billing error is:
- a mathematical error - when the business mails your statement to an incorrect home address - goods or services purchased without your authorization - being forced to pay for defective goods
Fair Credit Reporting Act
1971
How does the Fair Credit Billing Act protect consumer credit ratings?
By allowing consumers to challenge charges that are false and avoid having delinquent charges added to their credit history
The ______ handles complaints regarding credit cards online.
CFPB
Which of the following is true?
Creditors can use same collection methods with cosigner as could be used with the borrower.
The reason why people choose long-term financing is because it is cheaper in the long run. T or F?
FALSE. Reason: People choose long-term financing because it requires smaller payments, making it cheaper in the short run. However, you pay more interest when you repay a long-term loan.
Which of the following prohibits certain practices by agencies that collect debts for creditors?
Fair Debt Collection Practices Act
What should you do when you receive a phone call claiming to be from your bank?
Hang up, call your local bank, ask if there is something wrong with your account(s), and go to the bank the next day to verify your account(s)
Under the Consumer Credit Reporting Reform Act, what would happen if a Credit Bureau verifies inaccurate information?
If the Credit Bureau is wrong about information, the consumer can sue for actual, possibly punitive damages.
Where does the Consumer Credit Reporting Act place the burden of proof for accurate credit information?
It places the burden on credit reporting agencies.
What is the best strategy if you can't make a payment on a debt?
Notify the creditor as soon as possible in an attempt to work out a modified payment plan.
Why should you avoid sharing sensitive personal information with strangers?
Strangers can take this information and purchase items in your name.
The Consumer Financial Protection Bureau has a website for registering complaints regarding credit card situations.
TRUE Reason: The CFPB handles complaints regarding credit cards online.
The FCBA is a major reason that consumers should buy high dollar items with a credit card rather than a debit card.
TRUE Reason: The FCBA provides the consumer with recourse against a retailer on a credit card purchase
The Fair Debt Collection Practices Act prohibits certain practices by agencies that collect debts for creditors.
TRUE Reason: The act regulates the way collection agencies do business. For example, a debt collector may not contact you at inconvenient times or places.
Which of the following is not a warning sign of debt problems?
You pay your monthly credit card statement in full.
