Financial Management Ch7

A chapter 13 bankruptcy plan can be in effect for as many as ______ years.

5

Cash advances require that you pay a transaction _______

fee

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

What would be the interest coast (simple interest) for a 2000 loan with a 6% rate for a half of a year

60

Which of the following is generally considered to be expensive source of loans?

Finance companies Department stores Appliance companies Car dealers

Each 1% increase in the _____ rate means a decrease of approximately 1% in the quantity of goods and services you can purchase with given amount of money

Inflation

Another very expensive way to borrow is a(n) ______ refund loan, which is possibly more expensive than a cash advance on a credit card.

Tax

It is said that the least expensive way to borrow is when you borrow on the value of a financial asset

Certificate of deposit loan Life insurance cash surrender value loan

What is the best strategy if you can't make a payment on a debt?

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

Which of the following are ways to lower lender risk and therefore lower the cost of borrowing?

Only create short-term payments Secure a loan by property or another asset Make a larger down payment Choose variable interest rate

Family members may only charge interest they would have earned on the money if they had deposited in a _____ account

Passbook

Which of the following are advantages of borrowing from a credit union

Patient with borrowers Personalized service

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

Plan

Long-term financing is more costly than short-term financing because

You will pay more in interest charges

One of the intangible costs of bankruptcy is the difficulty obtaining ____ in the future

credit

Simple interest is calculated as follows: ______ X rate of interest X time

Principal

The two major categories or types of credit are _____ end and open end credit

Closed

Cash advances are obtained through your _____ card at a bank or through an ATM machine

Credit

If you borrow 200 and it cost you 22 in interest with a service charge of 5, what is the finance charge

27

If you have funds available on your credit card, you can obtain a cash advance from

A bank or credit union An ATM machine

Which of the following best explains why credit cards are more dangerous than installment loans

A credit card is easier to use than taking out an installment loan

The truth in lending law of 1969 requires lenders to state the coast of borrowing as a specific _____ amount so that consumers know exactly what the credit charges are.

Dollar

Credit cares are ____, but not always better, to use than installment debt because of the latter's application process and procedures; but that ease of use can lear overuse

Easier

Payday loans are ______ although readily available via check cashers, finance companies, and other sources

Expensive

The interest rate on cash advances is often _____ than the rate on purchases:

Higher

Looking for credit, aided by internet searches, is just as important as comparison _______ shopping for large purchases such as automobile, furniture, or major appliances

Shopping

Simple interest is calculated as follows: principal X rate of interest X _____

Time

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 their _____ services

Personal

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

assets