PF Ch. 5 Mult. Choice Semester 1

If you miss payments on a home equity loan, you can lose your: a. Savings account b. Car c. House d. Retirement account e. Furnishings

House

When used effectively, credit can result in: a. Default b. Bankruptcy c. Loss of creditwtworthiness d. Financial loss e. Improved lifestyle

Improved lifestyle

A direct loan for personal purposes, home improvements or vacation expenses is called: a. Credit card b. Installment cash credit c. Line of credit d. Open-end credit e. Single lump-sum credit

Installment cash credit

The periodic charge for the use of credit is: a. Line of credit b. Revolving check credit c. Interest d. Grace period e. Principal

Interest

Experts suggest that the debt payments-to-income ratio should be a maximum of: a. 0 percent b. 20 percent c. 25 percent d. 50 percent e. 100 percent

20 percent

A typical grace period for many credit card issuers is: a. 0-10 days b. 10-20 days c. 20-25 days d. 30-40 days e. 45-60 days

20-25 days

Personal Bankruptcy can be filed under which section(s) of the U.S. Bankruptcy code?: a. Chapter 7 b. Chapter 11 c. Chapter 13 d. A and C are correct e. B and C are correct

A and C are correct

The Consumer Credit Counseling Service: a. Aids families with serious debt problems by helping them to manage their money b. Is a consolidation firm that will manage bills for a percentage of the total payment due c. Provides counseling, usually for a fee e. All of the above

Aids families with serious debt problems by helping them to manage their money

The Equal Credit Opportunity Act (ECOA) prohibits a lender from discriminating: a. Race b. Nationality c. Age d. Sex e. All of the above

All of the above

What step can you take if your credit application is denied?: a. Sue the credit rating agency b. File a complaint against the merchant c. Ask why you were denied credit d. Reapply for credit once 30 days have passed e. Borrowers do not have any rights provided by law

Ask why you were denied credit

Installment credit exploded on the American scene with the advent of the: a. Airplane b. Automobile c. Cell phone d. Computer e. Train

Automobile

Under Chapter 7 of the U.S. Bankruptcy code,: a. All debts are forgiven b. Alimony and child support debts are released c. Certain assets receive some protection d. Taxes and fines no longer need to be paid e. Debt arising from driving while intoxicated is forgiven

Certain assets receive some protection

Molly purchased a $1,500 HDTV from Best Appliances. She will make 1 2 equal payments over the next year to pay for it. She is using: a. Closed-end credit b. Open-end credit c. Revolving check credit d. A line of credit e. None of the above

Closed-end credit

A credit cardholder who pays off his balance in full each month is known as: a. An impulsive lender b. Convenience user c. Home equity holder b. B and C are correct e. All of the above are correct

Convenience user

All of the following are consumer credit protection laws except: a. Truth in Lending and Consumer Leasing Act b. Equal Credit Opportunity Act c. Fair Credit Billing Act d. Credit Lawsuit Act e. Consumer Credit Reporting Reform Act

Credit Lawsuit Act

A credit report includes: a. Credit history b. Assumptions made by credit rating agencies c. Credit score d. Credit expectations e. All of the above

Credit history

Which of the following electronically subtracts money from your savings or checking account to pay for goods and services?: a. Credit card b. Closed-end credit c. Debit card d. Gift card e. Home equity loan

Debit card

Which of the following is an example of open-end credit?: a. Automobile loan b. Department store credit card c. Installment loan for purchasing furniture d. Mortgage e. Single lump-sum credit

Department store credit card

Following the signing of The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, debtors seeking to erase all debts will have to wait ______ years from their last bankruptcy before they can file again.: a. One b. Three c. Seven d. Eight e. Ten

Eight

Which of the following is NOT a credit bureau?: a. Experian b. Equifax c. Trans Union d. FICO e. All of the above are credit bureaus

FICO

Which of the following acts sets procedures for promptly correcting billing mistakes, refusing to make credit card or revolving credit payments on defective goods, and promptly creating accounts?: a. Experian Act of 1982 b. Fair Credit Reporting Act of 1971 c. Bills and Disputes Act of 1963 d. Equifax Act of 1979 e. Fair Credit Billing Act of 1975

Fair Credit Billing Act of 1975

If you double the monthly payment for a credit card, the loan will be paid of in: a. Half the time b. Less than half the time c. More than half the time d. The additional payment will have no impact e. Not enough information to answer

Less than half the time

Which of the following is an example of closed-end credit?: a. Mortgage b. Department store credit card c. Overdraft d. Line of credit e. All of the above

Mortgage

Which is often considered to offer the least expensive loans?: a. Banks b. Finance companies c. Loan companies d. Parents and family members e. Savings and loan association

Parents and family members

The minimum monthly payment on a credit card is: a. The amount to be paid without paying interest b. The interest amount charged for the month c. The minimum to be paid to avoid any charges or fees d. The smallest amount you can pay and remain a borrower in good standing e. The amount needed to pay off the credit card in one year

The smallest amount you can pay and remain a borrower in good standing

Many think that 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 lack of an increase in total purchasing power e. The increased satisfaction during present and future income periods

The temptation to overspend

Which of the following is the only online source authorized to provide a free credit report each year at your request?: a. www.annualcreditscore.com b. www.freecreditreport.com c. www.onlinecreditreport.com d. www.freecreditscore.com e. www.annualcreditreport.com

www.annualcreditreport.com