ACC Review Unit 3

Shelly Sanders gets a loan for $3,000 and repays the loan in 12 monthly payments of $258 per month. Under the rule of 78s, what is the amount of interest included in her first payment?

$14.77

If your monthly net (after-tax) income is $1,500, what should be your maximum amount spent on credit payments?

$300

If a new car loan costs 6%, a used car loan would cost approximately ______ percent.

12%

This morning, you received a phone call regarding your debt you allegedly owe. If you dispute this debt, you must write to the debt collector and request verification of the obligation. How many days do you have to send this letter?

30

Approximately how many credit card users would be classified as "convenience users" who generally pay off their balances in full each month?

33%

If creditors add finance charges after subtracting payments made during the billing period, this is called the

Adjusted balance method

Which one of the following would NOT be a good use of a home equity loan?

Buying a new boat

you can often obtain medium-priced loans from

Commercial banks and credit unions

Which one of the following is a local organization that provides debt counseling services for families and individuals?

Consumer Credit Counseling Service

Which type of credit insurance repays your debt in the event of a loss of income due to illness or injury?

Credit accident and health insurance

Which of the following features does not accurately describe a line of credit?

Credit line approved before the money is actually needed

Payday, cash advance, check advance and postdated checks are _______ loans.

Expensive

The total dollar amount you pay to use credit is called the

Finance Charge

For which of the following types of credit plans is the interest tax deductible?

Home equity loan

A high-tech scam that uses spam or pop-up messages to deceive you into revealing your credit card number, bank account information, social security number, passwords, or other sensitive information is called:

Phishing

An unauthorized person who obtains a credit report under false pretenses may be

Subject to a fine and imprisonment

Which federal law protects you by requiring credit bureaus to furnish correct and complete information to creditors?

Truth in Lending Act

The debt payments-to-income ratio is

calculate by dividing monthly debt payments (not including house payments) by net monthly income

If there is incorrect information in your credit file

the credit bureau must re-investigate and modify or remove inaccurate data

Karen is notified by her credit card company that the credit limit on her credit card has just been increased to $10,000. This is one example of a change related to

A line of credit