UNIT 2 - SMARTBOOK - CHP 5-7

To improve your credit score, it is important to: Multiple select question. pay your bills on time. understand the computation of outstanding debt. increase the amount of credit outstanding. avoid applying for new credit cards.

pay your bills on time. understand the computation of outstanding debt. avoid applying for new credit cards.

The new Credit CARD Act requires creditors to include a warning on the monthly statement about making only the minimum ______

payment

Annual ______ rate is the yearly interest rate quoted by a financial institution on a loan.

percentage

There are several reasons that you should borrow from a credit union, including their patience in dealing with borrowers who have good reasons for missed payments, and they provide ________ service

personalized

Which of the following are advantages of borrowing from a credit union? Multiple select question. can get a loan without being a member personalized service interest free loans patient with borrowers

personalized service patient with borrowers

In Chapter 7 bankruptcy, a debtor is required to draw up a ______ listing his or her assets and liabilities. petition deposition subpoena contract

petition

A credit counseling organization usually provides credit management classes and helps you devise a credit management ______

plan, arrangement, scheme, strategy, or system

The Fair Credit Reporting Act of 1971: allows bankruptcy information to be reported up to seven years. does not allow affected consumers to sue consumer reporting agencies that negligently fail to comply with the act. does not allow credit reports to be provided to someone who will use it in the underwriting of insurance. regulates the use of credit reports, requires deletion of obsolete information, and allows access of their files to consumers.

regulates the use of credit reports, requires deletion of obsolete information, and allows access of their files to consumers.

Bankruptcy is the legal process by which a person, business, or government entity unable to meet financial obligations is: forced to set up a debt payment schedule. forced to pay what is owed. charged fines for unpaid debts. relieved of those debts by a court.

relieved of those debts by a court.

Family members may only charge interest they would have earned on the money if they had deposited it in a ______ account. local bank savings commercial bank open-end credit

savings

The major provisions of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009: Multiple select question. set a consistent due date for each month prohibit cards being issued to consumers over 60 unless they have a cosigner require companies to inform consumers of rate increases at least 25 days in advance. limits the issuer's ability to increase the interest rate in the first year state that a teaser rate must be good for at least six months

set a consistent due date for each month limits the issuer's ability to increase the interest rate in the first year state that a teaser rate must be good for at least six months

The two main activities of the CCCS are: Multiple select question. giving grants to families with heavy debt burdens. teaching families how to avoid heavy debt burdens in the future. helping families with debt problems by helping them manage debts. lending money to families with heavy debt burdens.

teaching families how to avoid heavy debt burdens in the future. helping families with debt problems by helping them manage debts.

If you have a complaint about a business while dealing with identity theft issues, you can file a complaint with: the Secret Service. the Privacy Rights Clearinghouse. the Social Security Administration. the Federal Trade Commission.

the Federal Trade Commission.

Who can a victim of identity theft call to network with other victims? the identity theft hotline the credit reporting agencies the bank the Privacy Rights Clearinghouse the Secret Service

the Privacy Rights Clearinghouse

The Act that prohibits creditors from giving inaccurate information or denying consumers the right to cancel credit accounts is: the Consumer Safeguard Act. the Consumer Advocate Policy. the Truth in Lending Act. the Consumer Protection Act.

the Truth in Lending Act.

When referring to credit, character means: the bank's willingness to lend credit to this individual. the borrower's attitude toward credit obligations. the borrower's attitude toward the bank or lending firm.

the borrower's attitude toward credit obligations.

When referring to credit, capacity refers to: the amount of savings a borrower has. the borrower's willingness to pay the credit balance. the borrower's assets. the borrower's financial ability to meet the credit obligation.

the borrower's financial ability to meet the credit obligation.

Character, capacity, capital, collateral, and conditions are known as ______. the conditions that are needed to work in credit management the creditor's bible the Cs the five Cs of credit

the five Cs of credit

Installment loans are a cheaper alternative to credit cards because: Multiple select question. installment loans are open-ended, meaning there is no due date. their interest rates are often lower than credit card rates. they often carry no interest rate. they are cheaper over many months or years when an extended payment period is needed.

their interest rates are often lower than credit card rates. they are cheaper over many months or years when an extended payment period is needed.

One reason some people use payday loans is that: they offer the best rates. they are convenient. they provide easy repayment. they are inexpensive.

they are convenient.

A reason why people tend to choose long-term financing is: they want to make smaller monthly payments. they want to make bigger monthly payments. they want to save money in the long run.

they want to make smaller monthly payments.

The most important thing you can do to improve your credit score is to pay your bills on _______

time

Simple interest (I) is calculated as follows: Principal × Rate of Interest × _________

time, length, duration, period, or term

What is the purpose of liquidity? to allow you to withdraw money on short notice to allow you to add money to accounts at any time to allow you to invest for the long term

to allow you to withdraw money on short notice

A method to confirm that you can pay for the loan is: your take home just covers monthly expenses and the loan payment. to have enough take-home pay to cover monthly expenses, the loan payment and other expenses. take-home pay does not cover monthly expenses

to have enough take-home pay to cover monthly expenses, the loan payment and other expenses.

What is the main function of a finance company? to make loans to consumers and small businesses to provide checking accounts with unlimited withdrawals to provide savings accounts with high interest rates to provide frequent access to cash machine

to make loans to consumers and small businesses

To calculate the debt payments to income ratio: total liabilities are multiplied by the consumer's net income. total monthly debt payments (excluding home mortgage) are divided by net monthly income. debit subtracted from equity is divided by net income. net worth is divided by the consumer's total liabilities.

total monthly debt payments (excluding home mortgage) are divided by net monthly income.

The costs of Chapter 13 bankruptcy include court costs, lawyer fees, and _________fees.

trustee, trustees, or trustees'

When evaluating a home equity loan, which of following should be examined? Multiple select question. whether payments are applied to interest only protection against low interest rates terms and condition changes hidden fees

whether payments are applied to interest only terms and condition changes hidden fees

Annual percentage rate is the _______ interest rate quoted by a financial institution on a loan.

yearly or annual

If you are denied credit by a bank or credit union, you should question: why loan companies charge higher rates. your ability to afford the higher rate charged by a loan company. whether you should sell your belongings and become a hermit. whether or not the bank and credit union evaluated your application fairly.

your ability to afford the higher rate charged by a loan company.

What would be the interest cost (simple interest) for a $2,000 loan with a 6% rate for a half of a year?

$2,000 ×0.06×0.5 =$60

Rank the following items in the order they should be completed to dispute a billing error. - Receive an acknowledgment from the credit company - Write a letter of complaint - Purchase placed in dispute - Purchase removed or credit issued to account

1 - Write a letter of complaint 2 - Purchase placed in dispute 3 - Receive an acknowledgment from the credit company 4 - Purchase removed or credit issued to account

How is collateral used in evaluating loans? Collateral is using one item to pay for another item. Collateral is used when you apply for a credit card and the company is needing payment, so they take your home and sell it for payment. Collateral is used when you apply and sign for a loan, pledging some kind of property to secure the loan.

Collateral is used when you apply and sign for a loan, pledging some kind of property to secure the loan.

Which of the following loans are offered by credit unions to consumers? Multiple select question. Credit card loans Passbook loans Installment loans Share draft loans

Credit card loans Installment loans Share draft loans

An example of a travel and entertainment card is ______. Visa Discover Diners Club MasterCard

Diners Club

Select the bonds that are a type of federal savings bond. Multiple select question. LL EE I HH

EE I

The law that protects consumers by setting standards for correcting billing mistakes and allowing customers to avoid paying for defective merchandise is called the ______. Fair Credit Buying Act Personal Credit Requirement Act Fair Credit Billing Act Personal Credit Buying Act

Fair Credit Billing Act

True or false: Family loans are simple arrangements and can benefit both parties and no documentation is recommended.

False

True or false: When suing a creditor, you can sue for actual damages and $15,000 in punitive damages.

False You can only claim up to $10,000 in punitive damages.

True or false: If you find a problem in your bill, you should notify the credit bureau in writing within 60 days.

False You should notify the creditor, not the credit bureau.

What does the Fair Credit Billing Act (FCBA) do? It allows consumers access to credit card company files and tax documents. It corrects mistakes and returns defective goods on behalf of consumer. It protects consumers from discrimination when applying for a loan. It protects consumers with billing mistakes and provides assistance in avoiding payment for defective merchandise. It allows consumers options to design the terms of their loans and decide their own payback option.

It protects consumers with billing mistakes and provides assistance in avoiding payment for defective merchandise.

What is the procedure under consumer credit laws when denial of credit is discriminatory? Multiple select question. Make threatening phone calls to the creditor. Make the creditor aware of your understanding of the law. File a complaint with the government. Report the creditor to the Better Business Bureau. Sue the creditor.

Make the creditor aware of your understanding of the law. File a complaint with the government. Sue the creditor.

What is the best strategy if you can't make a payment on a debt? Make a partial payment in hopes of making a compensating payment next month. Wait until the debt is turned over to a collection agency since they will have the authority to work out a payment schedule. Contact your credit union or bank in hopes of borrowing to make the payment. Notify the creditor as soon as possible in an attempt to work out a modified payment plan.

Notify the creditor as soon as possible in an attempt to work out a modified payment plan.

True or false: The rate of return you earn on your savings account should be compared with the inflation rate.

TRUE In general, as the inflation rate increases, the interest rates offered to savers also increase. This gives you an opportunity to select a savings option that will minimize the loss in value of your dollars on deposit.

How does the Secret Service fight identity theft? The Secret Service tries to catch the thief in the crime by posing as specific persons who lose their identity. The Secret Service provides a hotline for all identity theft victims. The Secret Service typically focuses on financial fraud cases with large amounts of money involved. The Secret Service uses intelligence to locate thieves in other countries.

The Secret Service typically focuses on financial fraud cases with large amounts of money involved.

If you purchase a new but defective item that the business will not accept as a return, what does the FCBA require? The credit card company will work with you and the business to fix the item. The credit card company will allow you to withhold payment on such an item because it is defective. The credit card company is not required to handle these issues. The credit card company must refund your item and call the seller to check on the process that manufactured the defective part.

The credit card company will allow you to withhold payment on such an item because it is defective.

Why is paying only the minimum payment detrimental? The longer it takes for you to pay off a balance, the more finance charges you pay on an item. It is not detrimental. It is applied to the balance only and not the interest that is accrued.

The longer it takes for you to pay off a balance, the more finance charges you pay on an item.

What are some disadvantages of credit? Multiple select question. The temptation to overspend. Future income may decrease. Allows you to buy now, pay later. FICO credit scores.

The temptation to overspend. Future income may decrease.

True or false: A reliable way to see if you can afford a loan is to determine what you will give up to make the monthly loan payment.

True

True or false: A credit bureau is a reporting agency that collects credit and other information about consumers.

True

True or false: In most cases, it is less expensive to borrow money using your certificate of deposit as collateral for a loan than if you use your used car.

True

True or false: Loans from finance companies and appliance stores tend to be the highest cost loans.

True

True or false: People who have a strong willingness and ability to repay debts generally have the highest credit ratings.

True

True or false: The Fair Debt Collection Practices Act prohibits certain practices by agencies that collect debts for creditors.

True

True or false: The rule of 78s is a mathematical formula to determine how much interest has been paid at any point in a loan.

True

True or false: The purpose of the Truth in Lending law of 1969 was to give consumers the information needed to compare credit costs on various loans.

True The law required the reporting by lenders of the cost of the loan as a dollar amount so comparisons could be made.

The _____ in Lending Act prohibits creditors from giving inaccurate information or denying consumers the right to cancel credit accounts.

Truth

Which of the following best explains the flaw in the strategy of borrowing from a finance company? When you are denied credit from traditional sources, you probably have less ability to afford the higher rate a finance company charges. Even though finance company rates are lower, you will pay a much higher application fee, which you probably can't afford.

When you are denied credit from traditional sources, you probably have less ability to afford the higher rate a finance company charges.

If you have funds available on your credit card, you can obtain a cash advance from ______. Multiple select question. any retail merchant a bank or credit union an ATM

a bank or credit union an ATM

When errors are found in your credit report: your credit score decreases. the individual must make the change themselves. a correction can be made. there is nothing that can be done.

a correction can be made.

What is a credit bureau? a reporting agency that collects information on how promptly people and businesses pay their bills a reporting agency that collects information to provide to future employers only a reporting agency that tells consumers the exact method to increase their credit score a reporting agency that tracks your dining preferences

a reporting agency that collects information on how promptly people and businesses pay their bills

Capacity is the borrower's financial ___ to meet the credit obligations.

ability

The interest rate on cash _______ is often higher than the rate on purchases.

advances

A creditor cannot deny an adult credit based on ______ sex, race, color, religion, or marital status.

age

A deposit ticket is used to add funds to Blank______. a stock balance an account a utility payment

an account

A line of credit is: an example of closed-end credit. an open-end type of credit that the lender makes available to the borrower. never associated with credit cards. the required amount that the lender makes available to the consumer.

an open-end type of credit that the lender makes available to the borrower.

The pros and cons of T&E credit cards, such as American Express, include: Multiple select question. annual fees are typically low. annual fees are typically high. partial payment of the balance is due each month. a monthly finance charge is due regardless of the balance. full payment is due each month. no finance charge is incurred as full payment of the balance owed is due each month.

annual fees are typically high. full payment is due each month. no finance charge is incurred as full payment of the balance owed is due each month.

How often should you review your credit report? annually semiannually weekly monthly

annually

Typically, qualified cosigners: are able to pay loan payments. will not pay the loan payments. have many addresses. have a poor credit history.

are able to pay loan payments.

When cosigners sign their loans, they: are stating that they will pay the loan only after being sued. are stating that they are able to pay for the loan if required. are unable to pay the loan if needed, but will do everything they can to pay.

are stating that they are able to pay for the loan if required.

The first thing a debtor must do in a Chapter 7 bankruptcy is to draw up a petition listing _________ and liabilities or debts for submission to the court.

assets

Which of the following is generally considered to be expensive sources of loans? Multiple select question. credit unions bank credit cards department stores finance companies appliance companies

bank credit cards department stores finance companies appliance companies

What is the legal process by which a person, business, or government entity unable to meet financial obligations is relieved of those debts by a court? bankruptcy deregulation contract consideration

bankruptcy

Which of the following are signs of possible debt problems? Multiple select question. borrowing money to pay old debts decreasing the total balance due on credit cards every month getting a credit card revoked having little in savings using up savings

borrowing money to pay old debts getting a credit card revoked having little in savings using up savings

A borrower's assets in excess of liabilities is called ______. collateral the amount of money the borrower owns the personal financial statement obligations capital

capital

When evaluating the 5 Cs of credit, Blank______ is determined by a borrower's assets or net worth. collateral conditions capital capacity

capital

Which of the following types of loans are offered by life insurance companies? unsecured installment loan second mortgage credit card secured by cash value cash value of whole life

cash value of whole life

The savings alternative that offers less liquidity is: certificates of deposit. savings accounts. money market accounts.

certificates of deposit.

It is illegal to deny credit based on: Multiple select question. income of applicant. child bearing possibility of applicant. sex of applicant. age of a 70 year old.

child bearing possibility of applicant. sex of applicant. age of a 70 year old.

One of the 5 Cs of credit is _____. This is a valuable asset that can be taken to satisfy a loan obligation.

collateral

The costs to Chapter 13 bankruptcy include ______. court costs checking account fees attorneys' fees trustees' fees and costs

court costs attorneys' fees trustees' fees and costs

Cash advances are obtained through your __________ card at a bank or through an ATM machine. This is a one-word answer and found in the discussion of cash advances.

credit

The most commonly purchased type of credit insurance is: credit life insurance. credit property insurance. credit accident and health insurance.

credit life insurance.

One of the intangible costs of bankruptcy is the difficulty obtaining _______ in the future.

credit, loans, or loan

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, financier, creditors, or lenders

Using savings for ________ living expenses is one of the mistakes people make when managing current cash needs. This is a one-word answer.

current

The Fair Debt Collection Practices Act Blank______ to creditors that collect debts themselves. does not apply applies especially is related is very restrictive

does not apply

The Truth in Lending law of 1969 requires lenders to state the cost of borrowing as a specific _________ amount so that consumers know exactly what the credit charges are.

dollar

People who file a Chapter 13 bankruptcy and repay some of their debts may find obtaining credit Blank______ than people who file a Chapter 7 bankruptcy and make no effort to repay. more difficult easier impossible

easier

Payday loans are (inexpensive or expensive) _________ although readily available via check cashers, finance companies, and other sources.

expensive

True or false: Most credit card companies do not charge a fee when a cash advance is made.

false

True or false: The Fair Credit Reporting Act was enacted in 1960.

false Its establishment was in 1970-71

Most credit cards carry a special _____ based on the percentage of the amount borrowed, that is applied when a cash advance is taken out.

fee, charge, or rate

Which of the following should you consider when determining whether you can afford a loan? Multiple select question. funds remaining for other expenses how badly you want the item your monthly pay your monthly expenses

funds remaining for other expenses your monthly pay your monthly expenses

Credit cards can be a cheaper alternative to an installment loan if the need is short term (less than a month). This is because of the _________ period that is often allowed by credit card companies.

grace / float

The interest rate on cash advances is often _______ than the rate on purchases.

higher

Long-term financing is more costly than short-term financing because of higher _______ costs.

interest

The rule of 78s formula favors ______. the Consumer Financial Protection Bureau the Federal Reserve borrowers lenders

lenders

When reviewing applications for credit: lenders use the five Cs as a way of determining who is worthy of the credit. lenders use the five Cs as a way of determining who should reapply for credit. lenders use the five Cs as a way of creating diversity in offering loans.

lenders use the five Cs as a way of determining who is worthy of the credit.

It is said that the least expensive way to borrow is when you borrow on the value of a financial asset. Which of the following loans would meet that test? Multiple select question. a home equity loan life insurance cash surrender value loan a credit card cash advance certificate of deposit loan

life insurance cash surrender value loan certificate of deposit loan

A common trade-off (opportunity cost) for financial services includes having to keep money in accounts longer to obtain higher interest rates. This leads to reduced ______. services paperwork liquidity convenience

liquidity

The Fair Credit Billing Act provides that you may withhold payment on damaged or defective goods or poor services you have purchased with a credit card as long as you have: given the merchant a bad Yelp review. written letters to the merchant complaining about the product. called the credit reporting agencies to report the problem. made a sincere attempt to resolve the problem with the merchant.

made a sincere attempt to resolve the problem with the merchant.

Credit life insurance is generally ______ expensive compared to equivalent term life insurance. more equally less

more

Two situations when you should avoid credit are: when you don't _______ or really want the purchase, and when you could pay cash but choose to finance the needed item.

need

To calculate the debt payments-to-income ratio, total monthly debt payments (excluding home mortgage) is divided by the _________ monthly income of the consumer. This is a one-word answer.

net

A loan from the bank for personal use is considered _______ cash credit.

installment

A line of credit is a(n) _______ ended type of credit.

open

_________ is the attribute of savings accounts that allows you to withdraw money on short notice without a loss of principal or fees.

Liquidity

Benefits of money market accounts include: Multiple select question. higher minimum balance required. a favorable interest rate. charges for low balances. deposit insurance.

a favorable interest rate. deposit insurance.

A bank line of credit is also known as Blank______. a cashier's check a revolving check credit an open-end credit a debit card

a revolving check credit

Share draft accounts at a credit union: are no-interest bearing. offer large interest rates. offer no liquidity. are interest bearing

are interest bearing

Some things to consider when selecting your financial institution include: Multiple select question. switch kit requirements. convenience. fees and charges. online banking. services offered.

convenience. fees and charges. online banking. services offered.

A certified check is a personal check with ______. a specified interest rate guaranteed payment a certificate of deposit

guaranteed payment

What type of financial institution typically does not have federal deposit insurance? commercial banks savings and loans investment companies

investment companies

The savings alternative that offers more liquidity is: certificates of deposit. money market accounts.

money market accounts.

From which of the following sources can money orders be purchased? Multiple select question. post offices financial institutions stores ATM machines

post offices financial institutions stores

What is a typical grace period for retailers? 21 to 30 days 15 business days from the time sent 15 days up to 12 days

21 to 30 days

_________ users of credit typically pay off their balances each month.

Convenience

Use a credit card to: Multiple select question. buy online for large purchases. avoid an annual fee. avoid possible interest charges. delay the payment for a purchase. avoid bills to be paid in the future. obtain better fraud protection. build credit history.

buy online for large purchases. delay the payment for a purchase. build credit history.

Overdraft protection is designed to: increase the overall balance in the account. cover underfunded checks. be only available to long-standing customers. increase your prestige as a bank customer.

cover underfunded checks.

A regular savings account usually does not have: Multiple select question. difficulty in withdrawal. a high rate of interest. a low or no minimum balance requirement. a high balance requirement.

difficulty in withdrawal. a high rate of interest. a high balance requirement.

True or false: A home equity loan is never set up as a revolving line of credit where borrowings are allowed up to a specified limit and for a stated time period.

false

True or false: Pawn shops are only used during economic downturns.

false

Closed-end loans are ________ loans repaid within a(n) ________ time frame with equal payments.

one time specified

A savings plan that requires a certain amount of money to be left for a specified amount of time is not a: Multiple select question. passbook savings account. certificate of deposit. money market account. stock option.

passbook savings account. money market account. stock option.

High-cost financial services typically include ______. savings and loan associations payday loans rent-to-own centers commercial banks check-cashing outlets pawn shops

payday loans rent-to-own centers check-cashing outlets pawn shops

The rate of _______ is the percentage increase in the value of savings as a result of interest earned.

return

Criteria for selection of a savings plan include: safety. tax assistance. interest rate. convenience. liquidity.

safety. interest rate. convenience. liquidity.

Overdraft protection is an automatic loan made to checking account customers to cover checks written in excess of: their balance. the expected balance. the reconciled balance.

their balance.

Fraud charges on a debit card should be reported within _________ days of receiving your statement to protect your right not to be charged for the transaction.

60

You are in the 25% tax bracket, the before-tax savings rate of return is 12%, the after-tax yield on the savings account is: 4.5% 1.5% 9% 6%

9%

Which of the following is the best description of the importance of consumer credit in the United States? Consumer credit is a part of the U.S. economy, but is not a major force. Consumer credit is insignificant in the U.S. economy. Consumer credit is a major force in the U.S. economy. Consumer credit is relatively unimportant in the U.S. economy.

Consumer credit is a major force in the U.S. economy.

Actions you might take when you encounter difficulties with a banking app include: Multiple select question. Contact customer service for the bank or app Make sure that you are using the correct username and password Update app and phone software provide your username and password to a bank employee for verification

Contact customer service for the bank or app Make sure that you are using the correct username and password Update app and phone software

True or false: Achieving your financial goals and carrying out your daily activities require various financial services. True False

TRUE - There is no "one-stop" financial option to achieve your financial goals

True or false: Asset management accounts are a collection of financial services offered for a single fee.

True

A prearranged amount of money that is accessed with special checks is called: Multiple select question. a revolution of credit. a check access account. a bank line of credit. a revolving check credit.

a bank line of credit. a revolving check credit.

What types of financial institutions have federal deposit insurance through FDIC? Multiple select question. investment companies credit unions commercial banks savings and loans

commercial banks savings and loans

Economists now recognize ___________ ____________ as a major force in the U.S. economy

consumer credit

True or false: One criterion for choosing a saving plan is the interest rate.

false Interest rate is a major criterion for selecting a savings account

Achieving your financial goals and carrying out your daily activities require many _________ services.

financial

Asset management accounts are commonly offered by ______. corporations investment companies church organizations mortgage companies

investment companies

Saving funds for future use is necessary for financial ______. knowledge safety power liquidation

safety

A money market fund is a Blank______. credit account stock option savings instrument

savings instrument

A ______ draft account is an interest-bearing checking account at a credit union. This is a one-word answer.

share

The difference between a smart card and a regular credit card is: the IQ of the cardholder. there is no difference. the magnetic strip embedded on the side of the smart card. the metallic chip embedded on the front of the smart card.

the metallic chip embedded on the front of the smart card.

You are in the 25% tax bracket. So, the yield on the savings account is 8%, and the after-tax savings rate of return is Blank______. 8% 6% 2% 4%

6%

Credit allows you to buy clothes today and pay for them in the _______

future

A line of ______ is the maximum amount of funds lent to a consumer.

credit

______ bonds are not a type of federal savings bond. I Municipal EE

Municipal

What are ways to protect against credit card fraud? Multiple select question. Writing card number on a postcard or the outside of an envelope. Shred anything with your account number on it. Reviewing your billing statements. Making copies of credit cards. Don't give your card number over the phone unless you initiate the call.

Shred anything with your account number on it. Reviewing your billing statements. Don't give your card number over the phone unless you initiate the call.

How can a consumer get a credit card if they have bad credit? The consumer can write a letter to the bank explaining their circumstances. The consumer cannot get a credit card or a bank card. The consumer can easily purchase a prepaid credit card and keep adding money to it. The consumer may be able to get a secured credit card from a savings institution.

The consumer may be able to get a secured credit card from a savings institution.

Which of the following is a disadvantage of paying the minimum payments on credit cards? The payment of the minimum maintains your credit score but is costly. The minimum payment decreases your credit limit. The payment pays for interest and very little of the balance due.

The payment pays for interest and very little of the balance due.

True or false: Credit is defined as an arrangement to receive cash, goods, or services now with payment in the future.

True

Can credit cards be issued to consumers who have been irresponsible with credit? Yes, the bank will extend a credit limit up to the balance of a connected savings account. Yes, the bank extends the credit limit to an extra month's pay. No, irresponsible credit card users cannot use credit cards.

Yes, the bank will extend a credit limit up to the balance of a connected savings account.

A regular savings account usually offers: a high balance requirement. overdraft protection. a high rate of interest. a low or no minimum balance requirement.

a low or no minimum balance requirement.

Which of the following are deposit-type institutions that serve as financial intermediaries? investment companies commercial banks savings and loans associations insurance companies credit unions

commercial banks savings and loans associations credit unions

In what way can credit help consumers live more efficient and productive lives? getting a loan for a medical emergency buying a new automobile for work buying trendy clothes getting a loan for TV

getting a loan for a medical emergency

What are the three types of closed-end credit? Multiple select question. installment cash credit single lump-sum credit single time-series credit installment sales credit installment series credit

installment cash credit single lump-sum credit installment sales credit

What type of credit is a home equity loan? open-end credit interest credit card limits closed-end credit

open-end credit

What is the difference between convenience users and borrowers? payment amounts that are more than $1,000.00 the credit limit amount of the consumer versus the balance amount payment of the full balance versus carrying over a balance the amount of credit used by a consumer versus a business the interest rate charged to the consumer versus a business

payment of the full balance versus carrying over a balance

Demand deposits are not ______. checking accounts payment accounts savings accounts

savings accounts

The rate of return is: the percentage required for fees on an account. the percentage change to switch accounts at banks. the percentage increase in the value of an account.

the percentage increase in the value of an account.

The interest rates charged by pawnshops are regulated by ______. the federal government the pawn shop dealer association the state other pawnshops

the state

An arrangement whereby borrowings are permitted up to a specified limit and for a stated period is known as: closed-end credit. a revolving line of credit. credit card limits. open-end credit.

a revolving line of credit.

True or false: Financial services can change due to such factors as changing interest rates and rising consumer prices.

True

True or false: The base computation for a home equity loan is the current market value of the home less the amount you still owe on your mortgage.

True

True or false: Time deposits include money in savings accounts and certificates of deposits.

True

Minimizing bank fees may require: regularly closing accounts. comparing financial institutions. not using a bank. finding a lifetime bank.

comparing financial institutions.

________ deposits include checking accounts and other payment methods. This is a one-word answer.

demand

Which of the following statements is true? Credit involves paying now for future satisfaction. Credit is an arrangement to receive cash or goods or service now and pay for them later. Consumer credit refers to the use of credit for buying a house. Credit used by a business is called consumer credit.

Credit is an arrangement to receive cash or goods or service now and pay for them later.

What are the services that finance companies typically do not offer? To provide checking accounts with unlimited withdrawals to make loans to consumers and small businesses to provide frequent access to cash machines to provide savings accounts with high interest rates

To provide checking accounts with unlimited withdrawals to provide frequent access to cash machines to provide savings accounts with high interest rates

True or false: The grace period is the time allowed to pay the balance on a credit card before interest accrues.

True

Use a debit card to: Multiple select question. avoid an annual fee. obtain better fraud protection. buy online for large purchases. avoid bills to be paid in the future. delay the payment for a purchase. avoid possible interest charges. build credit history.

avoid an annual fee. obtain better fraud protection. avoid bills to be paid in the future. avoid possible interest charges.

When comparing savings accounts rates of return, you should choose one that: is equal to the rate of inflation. beats the rate of inflation. is lower than the rate of inflation.

beats the rate of inflation.

A home equity loan can be seen as: taking a loan out against the value of your mortgage. borrowing money from future income. borrowing money against the value of your house.

borrowing money against the value of your house.

A savings plan that requires a certain amount of money to be left for a specified amount of time, subject to penalty for early withdrawal, is called a Blank______. passbook savings account money market account stock option certificate of deposit

certificate of deposit

A savings plan that requires a certain amount of money to be left for a specified amount of time, subject to penalty for early withdrawal, is called a ______. money market account stock option certificate of deposit passbook savings account

certificate of deposit

Common payment choices do not include ______. Multiple select question. corporate bonds ATM cards municipal bonds checks credit cards cash

corporate bonds municipal bonds

High-cost financial services typically do not include: Multiple select question. payday loans. pawn shops. credit unions. mutual savings banks. check-cashing outlets. rent-to-own centers.

credit unions. mutual savings banks.

A ________ ticket or slip is used to add funds to a bank account. This is a one-word answer.

deposit

Drawbacks of money market accounts include: Multiple select question. higher minimum balance required. a favorable interest rate. some institutions charging for low balances. insurance.

higher minimum balance required. some institutions charging for low balances.

Financial services will usually *not* be affected by: historically lowest consumer prices. interest rate fluctuations. various economic factors. rising consumer prices.

historically lowest consumer prices.

What are responsible purchases with a home equity loan? Multiple select question. new car for spouse home improvements family vacation jewelry for a Christmas party educational expenses

home improvements educational expenses

Closed-end credit is paying back a loan: over several payments with a partial payment agreement. over an unspecified amount of time. in a specified period of time and in payments of specified amounts.

in a specified period of time and in payments of specified amounts.

Purchasing a house for your growing family is an example of how credit can be used advantageously because doing so: increases your overall well-being. decreases your debt obligation. increases the size of your house. decreases your rental payment.

increases your overall well-being.

Common choices for making payments include all of the following except: cash. checks. online/mobile transfers. credit cards. installment loans.

installment loans.

All of the following are deposit-type institutions that serve as financial intermediaries except: credit unions. savings and loan associations. insurance companies. commercial banks.

insurance companies.

Financial services include: insurance. investments. financial planning. forced retirement. savings. payment services. borrowing.

insurance. investments. financial planning. savings. payment services. borrowing.

What type of financial institution typically does not have federal deposit insurance? investment companies commercial banks savings and loans

investment companies

Common mistakes made when managing current cash needs include: Multiple select question. lacking sufficient funds overspending delaying a purchase for a lower price using savings for current expenses saving too much money

lacking sufficient funds overspending using savings for current expenses

The definition of open-end credit is: loans made on a continuous basis and billed periodically for partial payment. loans that require full payment before extending additional credit. loans that are paid back over a specific time with equal payments. loans that are made and the option is open-ended as to if you want to repay.

loans made on a continuous basis and billed periodically for partial payment.

A ______ fund is an account used for savings offered by investment companies. municipal market mutual market credit market money market

money market