Personal Finance Chapter 6 and 7

The major differences between a premium prestige card and a regular credit card include ___________ Higher credit limits and additional perks and benefits
Credit card insurance is usually unnecessary since your liability on credit card losses is limited by law to ____________ $50
T/F: your credit score may affect how much you pay for auto insurance True
For the convenience credit card user the interest rate is __________. Irrelevant
Which of the following is not a disadvantage of credit cards? They allow the consumer the ability to rent cars and make online reservations
Which of the following are important to convenience users of credit cards? All of the above
What is the main distinguishing feature(s) for t&e cards? They do not offer revolving credit and the full balance must be paid each month
Which of the five c’s of credit would your actual home be in relation to your mortgage? Collateral
Which of the following is the best strategy for controlling and managing your credit cards and open debt? All are good strategies
How long do you have to begin an investigation into a billing problem under the Fair Credit Billing Act? 60 days
When you use a credit card at a store, the store is generally charged a fee ranging from 1.5% to 5%. What is this fee called? Merchant discount fee
Consider the “five cs of credit.” The category that considers the size of your investment holding or portfolio is __________. Capital
T/f: a convenience user doesn’t really care what the apr is on their credit cards true
Kendra always thought the grace period feature of her credit card was such a wonderful idea. Why, in essence, she is getting her purchases interest fee during this time. After taking dr. art keown’s personal finance course she learned a startling truth about grace periods. Most banks eliminate their grace period on new purchases if you don’t pay your balance in full
The process of mathematically evaluating your creditworthiness to obtain credit is called _______ Credit scoring
Which of the following regarding credit application analysis is incorrect? None of the above statements is incorrect; all of the above are true statements
Which of the following statements is most correct regarding a secured credit card? It is useful to someone who has bad credit or no credit established yet
By law you have certain rights in connection with the credit bureau. They are _________ All of the above
Which of the following is not an advantage of credit cards? The finance charge that accrues on the account if not paid off in full each month
The highest fico a consumer can achieve is ________________ 850
Leon is 28 years old and pays cash for everything he buys. He has never had credit in his name and never missed or been late on any bills he has ever had. He recently went online to check what has credit score was. Where do you think his credit score would be? None of the above
Which of the following is not a single-purpose credit card? Bank of America visa
Changes to your credit card policies and relates are usually announced via “_______”; which are notices enclosed with your bill. Bill stuffers
t/f: a convenience user of credit cards is someone who pays off the credit card balance each month true
credit cards are a form of ____________ credit open ended and revolving
having completed a personal finance class, you are now ready to give some advice to your free-spending friends. Which one is unwise? Quit using credit cards altogether
your credit card was stolen, and you did not realize that it was stolen until you received your most recent billing statement. You contacted the credit card company immediately after you read your statement. Fraudulent charges were as follows: $500 for a VCR, $400 for a new set of tires, $100 cash withdrawl, and $25 in interest charges on the above items. You did not carry credit card insurance. How much is your potential maximum liability? $50.00
which of the following apply to getting a cash advance with a credit card? All of the above
nancy tried to use her macys credit card at k-mart but was unsuccessful. Why? Her macys credit card is a single purpose card and can only be used at macy’s
getting a credit card while a college student is an excellent idea because all of the above
a low fico score __________ an cost you quite a bit when you get a mortgage loan
the fair and accurate credit transactions act (fact) allows everyone to a free copy of their credit report every year. Why is it a good idea to check your credit report every year? All of the above are good reasons
susan has never seen a copy of her credit report. Which of the following is not a credit bureau? Expedia
what rights would a college friend of yours have whose credit card application was denied? All of the above are correct answers
one of the following lists constitutes the five cs of credit. Select the correct one. Character, capacity, capital, collateral, conditions
the truth in lending act requires that all consumer credit agreements disclose the _________ in bold print? Annual percentage rate (apr)
credit scoring is not a flawless method of determining creditworthiness
which of the following statements would most correctly complete the following sentence? As the interest rate on a loan increases? The payment amount would increase (other things held constant)
home equity/second mortgage loans have two important advantages over most other types of loans. They are tax deductibility of interest and lower interest rates
a simple interest installment loan calculates interest on the unpaid balance. An add-on is less costly and calculates interest on the original balance
which of these are possible options for most people who cannot pay their bills? All of the above are possible options
a ____________ loan calls for the repayment of both the interest and the principal at regular intervals and is commonly referred to as loan amortization Installment
what is the type of loan where the entire interest charge is subtractd from the loan principal before you receive the money, and at maturity you repay the entire principal? Discount method
when do the payments on a Stafford loan begin? None of the above is correct
suppose you borrowed the money you needed to purchase an automobile and then failed to make a scheduled payment by the due date. Technically, you are in default
an advantage that direct or subsidized student loans have over other types of loan is you can borrow at a below-market rate, regardless of your credit situation and the after-tax interest rates are very attractive compared with other loans
what are the risks to the borrowers with adjustable-rate loans? It is harder to budget for loan payments that may increase during the term of the loan and that the market rates of interest may increase during the term of the loan
what is the name of the formal document that outlines the legal obligations of both the lender and the borrower? Note

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