This allows you to reach your financial objectives by enabling you to acquire some of the more expensive items in a systematic fashion without throwing your whole budget away.
Consumer credit
100
This is the most popular type of credit card.
A bank credit card
100
When wanting to open an account, regardless if it's a credit card or a revolving line of credit, what must you do first?
Fill out a formal credit application
100
What are some factors when "shopping around for the best deal."
(name at least two)
Annual fees, rate of interest, length of grace period, method of calculating balances
200
What are some basic concepts of why we use credit? (name at least two)
To avoid paying cash for large outlays, meet financial emergencies, convenience, investment purposes
200
This is the maximum amount of credit a consumer is allowed to have outstanding at any point in time.
Line of credit
200
What type of organization collects and stores credit information about individual borrowers?
The credit bureau
200
What determines whether you should have an annual fee on a credit card, or none at all?
How big of a spender you are. If you are a big spender, get an annual fee. If not, try to avoid them.
300
What is the debt safety ratio?
monthly consumer credit obligations/monthly take home pay
300
Which kind of credit card is determined by the amount of liquid collateral you are able to put up?
Secured or collateralized credit cards
300
What are American entitled to receive every year?
A free copy of their credit report
300
About 70% of people choose this route when faced by credit card abuse.
Straight bankruptcy
400
What tells banks that you're dependable and reliable?
Credit history
400
What kind of revolving credit is there on an as-needed basis and allows you credit without the hassle of a loan?
An unsecured personal credit line
400
What applies the interest rate to the average balance of an account over a billing period?
Average Daily Balance method (ABD)
400
What is the number one cause of credit card fraud?
Stolen account numbers
500
"Product should outlive the payment schedule." What is this called?
Rule of Thumb
500
If someone has $94,233 of interest on their home equity loan, how much of it can be tax-deductible if itemized?
100%. All interest charges on you home equity loan no more than $100,000 can be tax-deductible.
How does the Credit Card Act of 2009 affect minors/college students? (two reasons)
1. It states minors under 18 cannot have credit cards unless authorized by a parent or guardian's account.
2. College students without stable income cannot be issued credit cards.