5.08 Unit 5 Test
The interest rate, expressed in a yearly amount.
APR
A credit card is not linked to your checking account
Advantage
Can provide money for emergencies.
Advantage
Easy to purchase products and services.
Advantage
Helps you build your credit rating
Advantage
Reward programs.
Advantage
A fee charged to use the credit card. These fees are most common on "rewards" cards.
Annual Fee
Which of the following is NOT a negative consequence of bankruptcy?
Bill collectors will stop calling you.
Usually a month; your transactions are recorded and sent to you on a statement
Billing Cycle
The maximum dollar amount you can charge on your account. It is also called your limit.
Credit Line
Which of the following is NOT a payment that is made directly from your checking account?
Credit cards
Which of the following is not a legal responsibility of the lender?
Pay any fees or penalties on time
A summary of all your transactions. Will also include the due date of your payment.
Statement
Most Americans choose to get a loan for their car because:
They don't have enough money to buy a cash without a loan
Which of the following is NOT a part of the mission on the Federal Trade Commission?
To help consumers lower their interest rates
Bankruptcy should only be used as a last resort.
True
Chapter 11 Bankruptcy is for businesses only.
True
Financially literate people often take advantage of high-interest loans.
True
The main argument against payday loans is that they take advantage of the poor and most vulnerable people in society.
True
The main goal of Chapter 11 Bankruptcy is to develop a plan to return the business to profitability, while also paying creditors.
True
With Chapter 7 Bankruptcy, a person sells their property and possessions and in return, is debt-free.
True
Which of the following is NOT a tip for building good credit?
Use credit to live above your means
Which of the following is NOT an advantage of Chapter 13 bankruptcy
You are debt free within 60-90 days
Which of the following is NOT a way in which Chapter 7 and 13 are similar?
You get to keep your possessions.
Which of the following best describes a payroll card?
a prepaid debit card issue instead of a paycheck
Which of the 5 Cs refers to how the loan will be repaid?
capacity
Which of the six factors of a binding contract states that both parties must be legally able to enter a contract?
capacity
Which of the 5 Cs refers to the amount of money an individual has in checking, savings, and investment accounts?
capital
Paper and coins widely accepted as payment.
cash
Which of the 5 Cs refers to an individual's credit history?
character
Which of the following is NOT one of the 5 Cs of credit?
checking
Which of the 5 Cs refers to the item the money is being loaned for?
collateral
Receiving a product or service now, but paying for it later is known as
credit
Which of the following is not a legal responsibility of the borrower?
discover the identity of the person committing fraud
Who typically uses cash?
everyone
If I don't read the terms and conditions, then I don't have to follow them.
false
Which of the six factors of a binding contract states that no fraud is taking place by either party?
genuine agreement
If an individual receives a credit score of 750, which of the following is usually true?
good credit score; may receive a lower interest rate
If an individual receives a credit score of 825, which of the following is usually true?
high credit score; easily approved for loans
Which of the six factors of a binding contract states that the contract can't violate a law?
legality
A lender that charges a high-interest rate on a loan.
loan shark
A loan for a house is known as a ____________.
mortgage
Which of the following is not a type of high interest loan?
mortgage
Which of the six factors of a binding contract is what the lender is giving you?
offer
Agreement in which a lender loans the amount of a person's upcoming paycheck.
payday loan
Rent-to-Own agreements are bad for consumers because:
the high interest rate makes the item cost much more than they could buy it for elsewhere
Which of the following is NOT a core goal of the Consumer Financial Protection Bureau?
to help pay off your debts
Credit reports are generally not used for which of the following?
whether to charge a person with a crime
If an individual receives a credit score of 500, which of the following is usually true?
will be rejected for most loans
Student loans do not have to be repaid under Chapter 7 Bankruptcy, but they still must be paid under Chapter 13.
False
If you pay your balance in full beofore the due date during this period, you will not be charged interest.
Grace Period
In some states, payday loans have been capped at what APR?
36%
_____________ (Fill in the blank)cards are linked to your checking account, while _________ (Fill in the blank)cards are paid later
Debit; credit
Financial fraud
Disadvantage
Too easy to blow your budget
Disadvantage
Will pay interest if balance not paid each month
Disadvantage
Under Chapter 13 Bankruptcy, individuals do not have to go before a judge.
False
Under Chapter 13 Bankruptcy, individuals have 4-6 years to repay their debts..
False
Which of the following is NOT one of the credit reporting agencies?
FICO
If an individual receives a credit score of 600, which of the following is usually true?
If approved, will usually pay a higher interest rate
Many credit cards will try to woo new customers by offering a low interest rate.
Introductory Period
If your payment is received after the due date, you will be charged this fee, usually around $36.
Late Payment
_____________ (Fill in the blank)allow customers to pay a deposit on an item, and then later pay the balance. Under these plans, the customer does not receive the item until the balance is paid in full.
Layaway plans
The smallest amount you can pay each month.
Minimum Payment
