PF CH 5
A loan for a motorcycle is an example of: A. vehicle credit B. closed-end credit C. open-end credit
B. closed-end credit
Consumer credit through installment payments became popular in the early 20th century due to: A. the popularity of business loans B. the popularity of the automobile C. the popularity of credit cards D. the popularity of home mortgages
B. the popularity of the automobile
Which of the following are questions that lenders may ask to determine a potential borrower's CHARACTER? -How long have you held your current job? -What assets do you have to secure the loan? -Have you used credit before? -How long have you lived at your present address? -How much is your salary? -What are your assets?
-How long have you held your current job? -Have you used credit before? -How long have you lived at your present address?
Which of the following items of income and value are protected under a Chapter 7 bankruptcy? -Recreational equipment -Social Security payments and unemployment compensation -Equity in home -Household appliances -All stocks and bonds -Trade tools -Equity in cars
-Social Security payments and unemployment compensation -Equity in home -Household appliances -Trade tools -Equity in cars
Which of the following is not true? A. APR is a key to comparing credit costs. B. The APR is the relative cost of credit on a yearly basis. C. The finance charge is the total dollar amount you pay to use credit. D. The finance charge does not include credit-related insurance premiums.
D. The finance charge does not include credit-related insurance premiums.
A billing error is: -Being forces to pay for defective goods -Showing your credit score on your statement -Goods or services purchased without your authorization -A mathematical error -When the business mails your statement to an incorrect home address
-Being forced to pay for defective goods -Goods or services purchased without your authorization -A mathematical error -When the business mails your statement to an incorrect home address
Where does the Consumer Credit Reporting Act place the burden of proof for accurate credit information? A. It places the burden on credit reporting agencies. B. It does not regulate the burden of proof, but provides restrictions for the former of credit card statements. C. It places the burden on the consumer. D. It does not regulate the burden of proof, but states that all reporting of credit must be within 90 days of credit transactions.
A. It places the burden on credit reporting agencies.
A bank line of credit is also known as: A. a revolving check credit B. an open-end credit C. a debit card D. a cashier's check
A. a revolving check credit
Assets protected in a Chapter 7 bankruptcy do NOT include: A. savings account B. vehicle C. social security payments D. net value of home
A. savings account
Which of the following is not a way to recognize, avoid, and report fraud on the internet? A. Keep records of online transactions B. Use a secure browser C. Give your password to someone online you think you can trust D. review monthly bank and credit card statements
C. Give your password to someone online you think you can trust
What would be the interest cost (simple interest) for a $3,000 loan with a 8% rate for nine months of a year? A. $300 B. $240 C. $400 D. $180
D. $180
Under the Consumer Reporting Reform Act, what would happen if a Credit Bureau verifies inaccurate information? A. The Credit Bureau pays a fine to the Fair Credit Reporting Agency. B. The Credit Bureau corrects the information and is not liable for damages. C. The consumer must may the state attorney to sue for damages. D. If the Credit Bureau is wrong about information, the consumer can sue for actual, possibly punitive damages.
D. If the Credit Bureau is wrong about information, the consumer can sue for actual, possibly punitive damages.
The Fair Credit Billing Act's underlying purpose is: A. to protect the credit agencies from consumer complaints B. to get the lowest possible interest rate for its clients C. to collect the outstanding debt consumers owe creditors D. to protect consumer credit ratings
D. to protect consumer credit ratings
A line of credit is a (fill in the blank)-term loan that is approved before you actually need the money.
Short
T/F The FCBA is a major reason that consumers should buy high dollar items with a credit card rather than a debit card.
True
T/F The trade-off of using credit is it decreases the availability of money to spend in the future.
True
What is typically in a credit file? -Vehicle information on all vehicles purchased in the last 10 years -Whether checks have been returned for insufficient funds -Whether you rent or own your home -Employer information -Education background -Ethnicity
-Whether checks have been returned for insufficient funds -Whether you rent or own your home -Employer information
Which of the following prohibits certain practices by agencies that collect debts for creditors? A. Fair Trade Commissioning Act B. Fair Debt Collection Practices Act C. Fair Unsolicited Collection Agency Act
B. Fair Debt Collection Practices Act
The five C's refer to: A. a way bankers can legally deny good potential customers B. policies that help determine who will receive credit C. uniform policies that all creditors use in the same way
B. policies that help determine who will receive credit
Lenders may determine a potential borrower's character by all of the following except: A. checking the potential borrower's credit report B. checking personal or professional references C. verifying the potential borrower's income D. verifying how long you have been at your current job
C. verifying the potential borrower's income
Long-term financing is more costly that short-term financing because: A. You will pay more upfront interest B. Long-term financing has higher cost application fees C. you will pay more in interest charges D. you will be charged greater service fees
C. you will pay more in interest charges
What demographic originally used credit? A. Everyone B. Affluent Individuals C. Politicians
B. Affluent Individuals