Chapter 13 Test
A [check card] might be a safe option for travel spending if you cannot get a credit card.
False
A typical revolving credit card account will begin adding interest twenty to thirty days [before] the grace period.
False
Always [discard] old bank statements that you no longer need.
False
If the APR on your credit card account is 24 percent, the monthly interest rate is [14 percent.]
False
Many monthly fixed expenses are some type of [installment credit.]
False
Your spending in installment payments should not exceed [$9,000] in a year if your annual net income is $35,000.
False
How do businesses make additional money on gift cards? a. Most shoppers spend more than the amount on the gift card. b. Many shoppers do not use the gift card. c. Many shoppers do not use up the entire amount on a gift card. d. All of the above
D
The new balance on a credit card statement includes a. debits for new purchases and interest. b. credits for previous payments. c. credits for returned items. d. All of the above
D
Which of the following can you do to prevent credit fraud? a. Protect your personal and financial information. b. Check your credit report annually c. Notify creditors if your credit cards are stolen. d. All of the above
D
Which of the following is not included on a credit report? a. the number of inquiries about the report b. the number of late payments made c. the amount placed with collection agencies d. the amount of your annual income
D
Why is getting a cash advance on your credit card more costly than charging merchandise? a. A higher interest rate is charged on a cash advance. b. There is no grace period. c. Purchases must be paid off before your payments will count toward the cash advance. d. All of the above
D
the legal exemption from the responsibility of repaying certain kinds of debt
bankruptcy
the act of a sales clerk's copying a customer's credit card receipt and using the card number to order something on the Internet
credit fraud
a span of time in which the balance on a credit card can be paid in full to avoid finance charges
grace period
using someone else's personal and financial information to apply for a credit card in that person's name
identity theft
a type of loan with a fixed number of payments to be paid at specific times
installment credit
preapproved revolving credit that can be used at the borrower's discretion
line of credit
the process of combining several monthly credit payments into one lower payment to manage debt more easily
loan consolidation
another term for a credit card
revolving account
a type of loan that reduces the lender's risk
secured loan
The difference between a charge card and a credit card is that with a charge card, a. you are never charged interest. b. the account is revolving. c. you pay a lower annual fee. d. All of the above
A
Which of the following is not a reason for your credit card interest rate to go up? a. You have never missed a payment on any credit account. b. Your debt level is too high. c. You have exceeded your credit limit on another card. d. Your credit score went down.
A
Which of the following is not a secured loan? a. cash loan to get through a temporary layoff from your job b. 5-year auto loan c. home equity loan to pay for a new roof d. 30-year, fixed-rate mortgage
A
Which of the following would be the best choice to get a loan and start building a good credit history? a. borrowing from a consumer finance company b. taking out a payday loan c. taking your valuable ring to the pawnshop d. borrowing against your tax refund
A
An identity thief is most likely to get access to your personal information if a. you write your Social Security number on your tax return. b. you leave your receipt at the ATM. c. you use a locked post office box to receive mail. d. All of the above
B
Which of the following could not be used to make purchases on credit? a. a Visa card issued by your bank b. a debit card issued by your bank c. a GapCard gift card d. a BP gasoline card
B
Which of the following is not an advantage of using credit? a. being able to purchase an item on sale even though you do not have the cash b. the opportunity cost of paying interest on interest c. being able to replace your broken garage door opener immediately d. keeping track of how much you spent on your vacation
B
Which of the following might be the least expensive source for getting a loan? a. a local bank b. a credit union where you are a member c. a local savings and loan d. a consumer finance company
B
If you find a credit card account that is not yours listed on your credit report, you should a. notify the FCRA and the credit bureau. b. notify all three credit bureaus in writing. c.notify the credit bureau and the credit card company in writing. d. All of the above
C
What action should you take first if you see that your debt is mounting? a. consolidate your loans b. file bankruptcy c. stop using your credit cards d. get a credit card cash advance
C
A [loan shark] is an example of a predatory lender.
True
If someone steals your wallet, you should contact the [Department of Motor Vehicles] in your state.
True
If you use a credit card to secure a hotel room reservation, the charges [will not] be applied immediately.
True
Not making payments on your home [equity] loan could lead to foreclosure.
True
a practice in which a credit card company changes a customer's interest rate because the customer has credit problems
universal default