UNIT 6- PERSONAL FINANCE

Jenny is 18 years old and has applied for credit for the first time. Her credit application was declined because she has no credit history. What should be recommended in order for Jenny to build a positive credit history? (1 point)

Jenny should obtain a secured credit card. (correct answer)

Edward wants to develop a positive credit history. How should he do this? (1 point)

Maintain reasonable amounts of available credit (correct answer, your response)

Which is not included in an individual's credit report? (1 point)

Medical information (correct answer)

Megan's credit card statement indicates that she is now paying a penalty APR. Which scenario best describes why?

Megan missed making her January and February credit card payments while she was participating in her college's Study Abroad program when the friend she left in charge of sending the payments in forgot.

Sarah will turn 18 next month. She plans to apply for a credit card. Which statement is true?

Sarah can only obtain a credit card if she has a co‐signer or proof of sufficient income to make the required payments.

When Bryce attempted to borrow money at the bank, he learned that his credit score is low. Which best describes what this is likely to mean for Bryce?

The interest rates on his loan will be higher, since his credit score is low. (correct answer)

Tyler is trying to be responsible in using his new credit card and has heard there is a way to avoid paying interest on the things he charges. How can he legally avoid paying interest when using his credit card?

Tyler needs to pay the credit card balance in full every month before the due date listed on the credit card statement.

Evan is writing a scholarship essay about the importance of responsible money management. He wants to explain the meaning of borrowing. Which would explain the importance of understanding the process of borrowing money?

When you are borrowing, you are spending future income.

Becky no longer wants to use her Clothes-R-Us store credit card. What is the best thing she could do with the credit card? (1 point)

Close the account by phone and in writing, then destroy the card. (correct answer)

Which is not an example of a data furnisher?

Credit card company (correct answer)

To answer the essay test question about the meaning of open‐end credit, Ryan should include which statement?

Credit is extended in advance so the borrower does not have to apply for credit each time credit is desired.

David earns $5,000 per month at his accounting job. He has a student loan payment of $120, a car loan of $300. Which statement is true?

David's credit payments are within the safe range for someone with his income.

Leah is trying to explain the difference between open-end and closed-end credit to her roommate. Which should she include in her description of closed-end credit?

Equal payments are required on a regular basis until the loan is repaid.

Jake's credit application has been declined because of his negative credit history. Which is most likely to be true?

Jake has applied for 4 credit cards and a car loan in the past 6 weeks.

The financial counselor that Ariel consulted about her use of credit recommended that she keep her use of credit within safe boundaries. Ariel's financial counselor most likely told her to:

keep the total amount of money she has borrowed, not including her house, under 20% of her net income.

Paying the minimum payment on a credit card every month will:

make the final amount paid substantially higher than the amount initially charged to the card.