PF Ch. 5 Mult. Choice ?'s

The same way they handle unsecured debt

Bankruptcy courts treat gift cards

Whether the good or service will be worth more because they were purchased with credit instead of cash

Before buying goods and services on credit, a consumer shoulder consider all the except:

A and B are correct

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:

All of the steps above are appropriate to take if she suspects identity theft

Carrie thought she misplaced her checkbook for a few days. When she found it, she noticed that two checks, her cash and her debit card were missing. She immediately though about the increase in identity theft in her area and decided to take some action. She should take all of the following steps except:

Dates back to colonial times

Consumer credit...

References

Credit bureaus get their information from all the following except:

Race or nationality

Credit files can include all except:

Inquiry by a neighbor

Credit reports can be obtained for all except:

20 percent

Experts suggest that the debt payments-to-income ratio should be a maximum of....

350 to 850

FICO scores generally range from...

All of the answers may be a result of failure to repay a loan

Failure to repay a loan may lead to all the except:

Eight

Following the signing of The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, debtors seeking to erase all debts will have to wait _____ years from their last bankruptcy before the can file again...

$280

Frederick received a $2,000 loan from the bank for some new appliances. The bank is using the simple interest formula from the two-year, 7% loan. What is his total interest?

.50

Hannah has liabilities totaling $25,000. Her net worth is $50,000. What is her debt-to-equity ratio?

Have interest that is tax-deductible

Home equity loans

Major expenses such as home improvements or education

Home equity loans should be used for...

$300.00

If Vinay charged $300 on his credit card with 18% APR and he paid his balance in full within the grace period, how much was he required to pay?

Higher than the stated rate

If a loan is being paid in installments instead of all at the end of the loan period, the actual rate of interest will be....

You are entitled to a free copy of your credit report

If you are denied credit,

60 days

If you are denied credit, you can contract the credit bureau and ask for a copy of your credit report. The bureau cannot charge a fee for this service as long as you ask to see your file within...

Less than half the time

If you double the monthly payment for a credit card, the loan will be paid off in....

1

If you have reached the upper limit of debt obligations, your debt-to-equity is about...

House

If you miss payments on a home equity loan, you can lose your...

Your creditor must reimburse you for your time spent researching the error

If you think a bill is wrong or you want more information about the bill, then you and your creditor should follow all the steps below except...

File a police report

If you think your identity has been stolen, which of the following actions does the Federal Trade Commission recommend you take immediately?

Do not need to have an account at the bank

If you want to file a complaint against a bank, you:

10 years

Information about a personal bankruptcy may be reported in your credit for...

Automobile

Installment credit exploded on the American scene with the advent of the...

Their incomes to increase to make it easier to make payments

Many people expect

The temptation to overspend

Many think that perhaps the greatest disadvantage of using credit is...

Closed-end credit

Molly purchased a $1,500 HDTV from Best Appliances. She will make 12 equal payments over the next year to pay for it. She is using...

$27.50

Paul borrowed $350 to be repaid in one year. He paid 10% interest and a service charge of $2.50. What is his finance charge?

A and C are correct

Personal bankruptcy can be filed under which section(s) of the U.S. bankruptcy code?

$27.50

Peter borrowed $250. He paid $25 interest and a service charge of $2.50. What is his finance charge?

17%

Rachel Efron has net monthly income of $2,400. She has a monthly auto loan payment of $250, a student loan payment of $120, and a credit card minimum payment of $40. What is her debt-payments-to-income ratio?

$10

Rachel Efron went to the ATM to draw $200 cash with her debit card. She inadvertently pulled out her credit card instead, not realizing the expenses for cash advances. If her credit card company charges a cash advance fee of 3 percent and interest at 24 percent APR, what are the total fees she will pay for her mistake?

The interest paid for the one year loan will be lower than the interest paid for the four year loan

Sam is comparing the costs of two loans. One is due in one year and the other is due in four years. Both have the same stated rate of interest. Which of the following is true?

$200

Suppose you borrow $200 for one year and pay a finance charge of $20. If you repay this loan all at once after one year, what is your average balance?

$70

Tanya received a $1,000 loan from the bank for a vacation. The bank is using the simple interest formula for this one-year, 7% loan. What is her total interest?

Annual

The APR is the percentage cost of credit on a(n) _______ basis.

Aids families with serious debt problems by helping them to manage their money better and set up a realistic budget

The Consumer Credit Counseling Service...

All of these are prohibited

The Equal Credit Opportunity Act (ECOA) prohibits a lender from discrimination based on...

Amount borrowed

The finance charge for credit includes all except:

The smallest amount you can pay and remain a borrower in good standing

The minimum monthly payment on a credit card...

Interest

The periodic charge for the use of credit is...

Character

The question "Will you repay the loan?" relates to....

Collateral

The use of property or savings to secure a loan relates to

12.1%

Timothy Calibe has net monthly income of $4,200. He has a monthly auto loan payment of $350, a student loan of $120, mortgage payment of $1,100 and a credit card minimum payment of $40. What is his debt-payments-to-income ratio?

$157.13

Timothy Caline went out to eat with his girlfriend at a fancy restaurant. When he tried to pay the bill with his Mastercard credit card, eh was told that the restaurant only accepted cash or American Express. His waiter suggested that he use the ATM across the street to withdraw cash using his credit card. Tim did as suggested and didn't pay attention to any fees until he received his credit card statement one month later. He was shocked to see the total fees (3% cash advance) and his APR was increased to 21%. Given the cost of the meal ($150) plus the associated fees, how much did this meal cost him?

Certain assets receive some protection

Under Chapter 7 of the U.S. Bankruptcy code,

Ask why you were denied credit

What step can you take if your credit application is denied?

Mortgage balance

When calculating the debt-to-equity ratio, the following is NOT included:

Deny you if you receive public assistance

When evaluating your credit application, a lender may NOT....

Improved lifestyle

When used effectively, credit can result in...

Allows borrowers to receive free annual credit reports

Which if NOT trust about the Fair Credit Reporting Act?

Parents or family members

Which is often considered to offer the least expensive loans?

Fair Credit Billing Act of 1975

Which of the following acts sets procedures for promptly correcting billing mistakes, refusing to make credit card or revolving credit payments on defective goods, and promptly crediting accounts?

Debit card

Which of the following electronically subtracts money from your savings or checking account for goods and services?

As the consumer goes, so goes the U.S. economy

Which of the following expressions is correct?

FICO

Which of the following is NOT a credit bureau?

All of the above are valid credit application questions

Which of the following is NOT a valid credit application question?

Paying for everyday living expenses

Which of the following is NOT a valid reason for borrowing?

Down payment on a home

Which of the following is NOT associated with credit cards?

Credit can increase the amount of money that will be available to spend in the future

Which of the following is NOT correct?

Credit cards typically offer a "float" of up to 10 days

Which of the following is NOT correct?

All of the above are valid reasons for borrowing

Which of the following is a valid reasons for borrowing?

Mortgage

Which of the following is an example of closed-end credit?

Department store credit card

Which of the following is an example of open-end credit?

You receive bills for a credit card account you never opened

Which of the following is often the first sign of a stolen identity?

VantageScore

Which of the following is the best scoring technique used in credit applications for consumers with limited credit histories?

www.annualcreditreport.com

Which of the following is the only online source authorized to provide a free credit report each year at your request?

Papers with personal information

Which of the following items should be shredded to protect yourself from identity theft?

All of the above are valid questions to ask

Which of the following questions is NOT needed before deciding how and when to make a major purchase?

The cosigner

Who is responsible for a loan repayment?

Capital

"What are your assets and net worth?" relates to

Accrues interest charges beginning the day the cash advance is made

A cash advance

Convenience user

A credit cardholder who pays off his balances in full each month is known as...

Credit history

A credit report includes

Installment cash credit

A direct loan for person purposes, home improvements or vacation expenses is called...

The maximum dollar amount of credit the lender has made available

A line of credit is

Capacity

A loan officer is examining examining whether or not he/she will offer you a loan today. Specifically, he/she is examining your income and debts. Which of the five C's is the loan officer reviewing?

Single lump-sum credit

A loan that must be repaid in total on a specified day, usually within 30 to 90 days is

Revolving check credit

A prearranged loan up to a specified amount that a consumer can access by writing a special check is known as...

20-25 days

A typical grace period for many credit card issuers is...

Actual damages plus twice the amount of any finance charges

According to the Fair Credit Billing Act, if a credit fails to follow the rules that apply to correcting any billing errors, you have the right to sue for...

$85,000

Acme Home Lending offers home equity loans up to 75% of the home value for its customers. If Sally Johnson has a home valued at $200,000 and a current mortgage of $65,000, how much can she borrow in a home equity loan from Acme?

Credit Lawsuit Act

All of the following are consumer credit protection laws except...

You pay your credit card bills in full each period

All of the following are signs of financial trouble except: