Chapter 5 HW Quiz

FICO scores generally range from A. 100 to 1000. B. 200 to 700. C. 350 to 850. D. 450 to 650. E. 500 to 1000.

C. 350 to 850.

Which of the following electronically subtracts money from your savings or checking account to pay for goods and services? A. A credit card B. Closed-end credit C. A debit card D. A gift card E. A home equity loan

C. A debit card

Perhaps the greatest disadvantage of using credit is A. The temptation to overspend. B. The convenience offered instead of using cash. C. The float from using credit. D. The increase in total purchasing power. E. The increased satisfaction during present and future income periods.

A. The temptation to overspend

Which of the following is an example of open-end credit? A. An automobile loan B. A department store credit card C. An installment loan for purchasing furniture D. A mortgage loan E. Single lump-sum credit

B. A department store credit card

Which of the following is NOT a valid reason for borrowing? A. Borrowing for a college education B. Paying for everyday living expenses C. Buying a car so a homemaker can return to work D. Paying for a medical emergency E. All of these are valid reasons for borrowing

B. Paying for everyday living expenses

Information about a personal bankruptcy may be reported in your credit file for A. 1 year. B. 3 years. C. 7 years. D. 10 years. E. Permanently.

D. 10 years.

Which of the following is often considered to offer the least expensive loans (loans with low interest)? A. Banks. B. Finance companies. C. Loan companies. D. Parents or family members. E. Savings and loan associations.

D. Parents or family members.

Who is responsible for a loan repayment? A. The store granting credit B. The credit card company C. The government D. The cosigner and/or the borrower E. The bank

D. The cosigner and/or the borrower

Which of the following is a valid reason for using credit? A. Purchasing a car so a homemaker can return to work B. Borrowing for a college education C. Purchasing an item that costs less now than it will later D. Paying for a medical emergency E. All of these are valid reasons for borrowing

E. All of these are valid reasons for borrowing

When misused, credit can result in A. Default. B. Bankruptcy. C. Loss of creditworthiness. D. A less satisfying life. E. All the choices are correct.

E. All the choices are correct.