Reivew
André is going to college, and his parents want to make sure he doesn’t overspend his money. They want him to stick to a strict budget. What is the BEST type of card for Andy to use? A. a gasoline card B. a secured credit card C. a smart card D. a retail credit card
B. a secured credit card
Nineteen-year-old Devon plans to get a credit card, but his parents say it is not a good idea. What fiscally responsible argument can Devon make to get his parents to explain why he should, in fact, get the credit card? A. He needs to be able to buy whatever he wants, whenever he wants it. B. He will get a card that charges no interest for the first six months so there is no risk. C. He needs a credit card if he wants to make any online purchases. D. He will only get a card that has a strong rewards program.
C. He needs a credit card if he wants to make any online purchases.
Pablo’s parents are encouraging him to build good credit history while he is at college. What is the BEST advice they should give Pablo? A. Use credit for everything. B. Apply for as many credit cards as possible. C. Use cash for most purchases. D. Only apply for credit cards with high interest rates.
C. Use cash for most purchases.
A bank line of credit is a prearranged loan amount that you can access by writing specific checks.
True or False
True
Sabrina bought a new washing machine. She put $50 down and pays $50 per month for the next 10 months to be able to make the purchase. Which type of credit did she use? A. an installment sales credit B. an installment cash credit C. a single lump-sum credit D. a bank line of credit
A. an installment sales credit
Gregory is trying to qualify for a loan and needs to show his perceived ability to pay back the loan. The bank is investigating not only his income but other debt responsibilities, housing costs, and the average cost of living in his area to determine whether he’ll have enough money coming in to cover all of these different financial responsibilities. Which of the “five C’s of credit” is Gregory’s bank trying to determine? A. collateral B. character C. capacity D. capital
C. capacity
Trevor is trying to apply for consumer credit. What purchase is he MOST likely planning to make? A. a home B. a car C. stocks and bonds D. investment properties
B. a car
Which is NOT one of the “five C’s of credit”? A. courage B. capital C. capacity D. collateral
A. Courage
What is the highest possible credit score on the FICO scale? A. 350 B. 550 C. 850 D. 1000
C. 850
Tina plans to buy her first car, but she has no credit history. The bank will give her a loan if she has a co-signer. How can Tina MOST accurately and efficiently meet their request? A. Ask her mother to pay the down payment for the car. B. Ask her mother to legally take responsibility for the debt. C. Ask her mother to tell the bank good things about her character. D. Ask her mother to join a credit union with her.
B. Ask her mother to legally take responsibility for the debt.
Melanie is having a lot of financial problems. She is drowning in debt and needs help. She is looking for an organization to help her. What is a sign of a reputable organization? A. They disclose your rights clearly and share with you free services that may be helpful to you. B. They charge you for their services before those services have been completed. C. They are not related to your personal bank or financial institution. D. They are not classified as a consumer protection agency.
A. They disclose your rights clearly and share with you free services that may be helpful to you.
Credit cards all use the same interest and finance charges. True or False
False
Pedro wants to open his own business. To get a loan for the business, the bank needs him to give them some collateral. What is a logical choice for Pedro to give the bank as collateral? A. his house B. his last paycheck stub C. a letter of recommendation D. copies of his will
A. his house
Smart cards are also known as gift cards.
True or False
False
Dante is making his first purchase using a credit. He asks his friend Tay to educate him about using credit. What is the BEST advice Tay can give him? A. Be prepared to pay back the original amount and additional interest. B. Make all of your purchases using credit once you have it. C. You have as much time as you need to pay back your debts. D. Credit purchases always cost less than paying with cash.
A. Be prepared to pay back the original amount and additional interest.