Question 1

Which one of the following is important to do to help avoid credit card fraud?

Accepted Answer

A)  sign your card as soon as you get it
B)  give out your credit card number over the phone
C)  write your credit card number on the outside of envelopes
D)  leave your credit card lying around anywhere
E)  if your billing statement is incorrect,ignore itF) B) and E)
G) A) and E) A

Question 2

Interest is a periodic charge for the use of credit,or other finance charges.

Accepted Answer

A) True 
 B)False  True

Question 3

Karen Price has determined that her net worth is $30,000,excluding her home.She owes $80,000 on her mortgage and $15,000 on a car loan.What is Karen's debt-to-equity ratio?

Accepted Answer

A)  3.2
B)  2.0
C)  0.5
D)  2.7
E)  0.3F) A) and B)
G) B) and D)

Question 4

What are the two general rules of measuring credit capacity?

Accepted Answer

Answers will vary

Question 5

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

Accepted Answer

A) True 
 B)False

Question 6

While you are resolving a billing dispute,a creditor may:

Accepted Answer

A)  not threaten your credit rating.
B)  send this information to a credit bureau.
C)  require you to pay the bill in full and then credit your account if the error is found.
D)  start the collection process.
E)  demand that you surrender your credit card.F) B) and E)
G) All of the above

Question 7

Consumer credit refers to the use of credit for personal needs (except a home mortgage)by individuals.

Accepted Answer

A) True 
 B)False

Question 8

A good example of open-end credit is:

Accepted Answer

A)  the use of a bank credit card to make a purchase.
B)  a mortgage loan from a savings and loan institution.
C)  an automobile loan from a credit union.
D)  an installment loan from a furniture store.
E)  an installment loan for purchasing a major appliancE.F) A) and C)
G) None of the above

Question 9

A debit card:

Accepted Answer

A)  immediately deducts the cost of your purchase from your bank account.
B)  credits your account at the moment you buy goods or services.
C)  is a new type of a credit card issued by VISA International.
D)  is another name for a travel and entertainment carD.
E)  typically has a credit limit of $1,000.F) All of the above
G) B) and E)

Question 10

In the 5 Cs of credit,capacity refers to the borrower's financial ability to meet credit obligations.

Accepted Answer

A) True 
 B)False

Question 11

Which federal law allows consumers to withhold payment for faulty or defective goods or services (within certain limitations) when purchased with a credit card?

Accepted Answer

A)  Truth in Lending Act
B)  Fair Credit Reporting Act
C)  Fair Credit Billing Act
D)  Equal Credit Opportunity Act
E)  Fair Debt Collection Practices ActF) A) and C)
G) A) and D)

Question 12

If you cosign and the debt is not paid off,that fact does not become a part of your credit record.

Accepted Answer

A) True 
 B)False

Question 13

The baby boom generation currently represents about 30 percent of the population but holds nearly ____________ percent of the debt outstanding.

Accepted Answer

A)  80
B)  70
C)  60
D)  50
E)  40F) All of the above
G) A) and D)

Question 14

The smaller the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

Accepted Answer

A) True 
 B)False

Question 15

The Federal Trade Commission receives more consumer complaints about credit bureaus than about any other industry.

Accepted Answer

A) True 
 B)False

Question 16

Debit cards are often called bank cards,ATM cards,cash cards,and check cards.

Accepted Answer

A) True 
 B)False

Question 17

A home equity loan is usually set up as a revolving line of credit,typically with a variable interest rate.

Accepted Answer

A) True 
 B)False

Question 18

The Fair Credit Billing Act has a provision in which a lender can threaten your credit rating while you are resolving a billing dispute.

Accepted Answer

A) True 
 B)False

Question 19

How do creditors determine your credit-worthiness?

Accepted Answer

Creditors determine your credit-worthine...

Question 20

Which federal law prohibits credit card issuers from sending unrequested cards?

Accepted Answer

A)  Truth in Lending Act
B)  Fair Credit Reporting Act
C)  Fair Credit Billing Act
D)  Equal Credit Opportunity Act
E)  Fair Debt Collection Practices ActF) C) and E)
G) B) and C)

Exam 6: Introduction to Consumer Credit

Which one of the following is important to do to help avoid credit card fraud?

Correct AnswerverifiedA

Interest is a periodic charge for the use of credit,or other finance charges.

Correct AnswerverifiedTrue

Karen Price has determined that her net worth is $30,000,excluding her home.She owes $80,000 on her mortgage and $15,000 on a car loan.What is Karen's debt-to-equity ratio?

Correct AnswerverifiedShow Answer

What are the two general rules of measuring credit capacity?

Correct AnswerverifiedAnswers will vary

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

Correct AnswerverifiedShow Answer

While you are resolving a billing dispute,a creditor may:

Correct AnswerverifiedShow Answer

Consumer credit refers to the use of credit for personal needs (except a home mortgage)by individuals.

Correct AnswerverifiedShow Answer

A good example of open-end credit is:

Correct AnswerverifiedShow Answer

A debit card:

Correct AnswerverifiedShow Answer

In the 5 Cs of credit,capacity refers to the borrower's financial ability to meet credit obligations.

Correct AnswerverifiedShow Answer

Which federal law allows consumers to withhold payment for faulty or defective goods or services (within certain limitations) when purchased with a credit card?

Correct AnswerverifiedShow Answer

If you cosign and the debt is not paid off,that fact does not become a part of your credit record.

Correct AnswerverifiedShow Answer

The baby boom generation currently represents about 30 percent of the population but holds nearly ____________ percent of the debt outstanding.

Correct AnswerverifiedShow Answer

The smaller the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

Correct AnswerverifiedShow Answer

The Federal Trade Commission receives more consumer complaints about credit bureaus than about any other industry.

Correct AnswerverifiedShow Answer

Debit cards are often called bank cards,ATM cards,cash cards,and check cards.

Correct AnswerverifiedShow Answer

A home equity loan is usually set up as a revolving line of credit,typically with a variable interest rate.

Correct AnswerverifiedShow Answer

The Fair Credit Billing Act has a provision in which a lender can threaten your credit rating while you are resolving a billing dispute.

Correct AnswerverifiedShow Answer

How do creditors determine your credit-worthiness?

Correct AnswerAnswered by ExamLex AICreditors determine your credit-worthine...View AnswerShow Answer

Which federal law prohibits credit card issuers from sending unrequested cards?

Correct AnswerverifiedShow Answer

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A

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True

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Answers will vary

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Answered by ExamLex AI
Creditors determine your credit-worthine...
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