Show:
Credit Dangers
Credit Options
Aspects of Credit
Causes of Bankruptcy
Miscellaneous
100
Name a responsibility that you have to your creditor and one that they have to you?
You have the responsibility to limit your spending to amoutns that you can repay according to the terms of the credit agreement. You also have to contact the creditor immediately when you find a problem with the bill or discover that the merchandise is defective. The creditor must assist you in making wise purchases, inform customers about all rules and regulations, and cooperate with established credit reporting agencies.
100
Why do credit unions offer lower interst rates on loans than do commercial banks?
They are nonprofit and they are organized for the benefit of members.
100
What is phishing?
A scam that uses online pop-up messages or e-mail to deceive you into disclosing personal information.
100
What is the 20/10 rule?
Advised for people beginning to use credit: your total borrowing should not exceed 20% for your annual income and 10% of your monthly income.
100
What is the single most important way to maintain a positive credit history? a) Avoid cosigning loans for others. b) Pay your bills on time. c) Avoid exceeding your credit limit on revolving accounts. d) Transfer credit balances often to take advantage of low introductory rates.
b) pay your bills on time.
200
How do you safeguard your credit card?
Sign your cards as soon as you recieve them, carry only the cards you need, keep a list of your credit card numbers, notify creditors immediatly by phone when your card is lost or stolen, watch your card during transactions, tear up any carbon or carbonless paper that contains account information, etc.
200
Why is it important to pay your bills when they are due rather than a few days late?
You will probably be charged a late fee.
200
What are the five C's of credit?
Character, Capacity, Capital, Conditions, and Collateral
200
What is the purpose of bankruptcy?
It relieves debtors of the responsibility of paying their debts or protects them while they try to repay.
200
How deep are U.S. consumers in debt? (Hint: It's more than you might think.) a) $97 billion b) $1.2 trillion c) $2.4 trillion
c) $2.4 trillion
300
What is the most dangerous aspect of credit?
Going into credit card debt.
300
How do credit reports benefit lenders? How do they benefit borrowers?
A business can see your creditworthiness and if it is satisfactory you can borrow credit from them.
300
What does the Equal Credit Opportunity Act entail?
Was designed to prevent discrimination in the judgment of creditworthiness
300
What are two major causes of bankruptcy.
Job loss, emotional spending,failure to budget and plan and catastrophic injury or illness.
300
True or false: Debt collectors can call you at any time to ask about unpaid bills.
False. Being a debtor doesn't mean collectors can use sleep deprivation techniques.
400
What kind of people do loan sharks target?
The poorest members of society who can least afford to pay.
400
What is the purpose of the Truth-in-Lending Law?
Requires lenders to fully inform consumers about all costs of a credit purchase before an agreement is signed.
400
Name three ways that credit card costs vary?
Source of credit, amount financed and length of time, ability to repay debt, type of credit selected, collateral, prime rate, economic conditions, and business costs of providing credit.
400
Name a disadvantage and an advantage of bankruptcy.
Advantages; debts are erased, exempted assets are retained, certain incomes are unaffected, the cost is small. Disadvantages; credit is damaged, property lost, some obligations, remain, some debts are reaffirmed, co-signers must pay.
400
Which is not a factor in determining your credit score? a) Marital status. b) Payment history. c) Length of credit history. d) Types of credit you have.
a) marital status
500
What are two ways to avoid unecessary credit costs?
Accept only the amount of credit that you need, make more than the minimum payment, do not increase credit spending when your income increases, keep the number of credit cards to a minimum, pay cash for purchases under 25$, understand the cost of credit, shop for loans, and take advantage of rebate programs.
500
Name three services that sell credit.
Retail stores, credit card companies, banks, credit unions, finance companies, pawnbrokers, and private lenders
500
There are two types of finance companies, consumer finance companies and sales finance companies, what is the difference between them?
Consumer Finance Companies make consumer loans to customers buying consumer durables. Sales Finance Companies make loans through authorized representatives.
500
Describe the difference between Chapter 7, Chapter 11 and Chapter 13 bankruptcy.
Chapter 7 bankruptcy: a liquidation form of bankruptcy for individuals that wipes out most debts in exchange for giving up most assets. Chapter 11 bankruptcy:a reorganization form of bankruptcy for businesses that allows the businesses to continue operating under court supervision as they repay their reconstructed debts. Chapter 13 bankruptcy: a reorganization form of bankruptcy for individuals that allows the debtors to keep their property and use their income to pay a portion of their debts over three to five years.
500
Name one of the three credit bureaus?
Experian, Transunion, and Equifax.