FINANCIAL CHAP 5

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

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


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