5-1
_________can be used repeatedly for purchases that will be paid back monthly.
(5-1)
a. Open-End Credit
b. Closed-End Credit
c. Cash Advance
d. Personal Loan
a. Open-End Credit
What is the APR (Annual Percentage Rate)?
(5-2)
a. The interest rate
b. The interest rate plus other loan costs/fees
c. The amount of interest paid
d. The percentage of loan paid
b. The interest rate plus other loan costs/fees
When would a variable rate loan be the most dangerous to consumers?
(5-2)
a. When interest rates rise.
b. When interest rates stay the same.
c. When interest rates fall.
a. When interest rates rise.
Which of the following is a benefit to having good credit?
(5-3)
a. Lower insurance rates
b. Lower interest rates on loans.
c. Lower interest rates on credit cards
d. All are benefits of having good credit.
d. All are benefits of having good credit.
"As a borrower, you have certain responsibilities to the companies issuing you credit. Which of the following is your responsibility?" (5-4)
a. Understand the terms of the agreement.
b. Make payments on time.
c. Repay the full debt.
d. All are a borrower's responsibility.
d. All are a borrower's responsibility.
Interest is not charged by the credit card company if you pay your balance in full by the due date.
(5-1)
True
False
True
Amortizing a $60,000 loan at 4% over 3 years. The payment for 36 months will be $1,771.44.
(5-2)
a. Over time, the interest portion goes up
b. Over time, the principal portion goes down
c. The interest paid over the life of the loan will be the same every month
d. Over time, the principal portion that is paid every month goes up
d. Over time, the principal portion that is paid every month goes up
Which of the following is an example of an unsecured loan?
(5-2)
a. Mortgage loan on a house
b. Auto loan on a car.
c. Student loan for college tuition.
d. None of these are unsecured loans
c. Student loan for college tuition.
Which of the following is true about how long information stays on your credit report?
(5-3)
a. 12 years on Chapter 10 bankruptcies
b. 5 years on civil claim judgements
c. 7 years for any late payments
d. 7 years on Chapter 7 bankruptcies
c. 7 years for any late payments
Jona was trying to find ways to start building his credit. You mention getting a loan deposited into a secure savings account. Repayment of the loan is reported to credit agencies and Jona will get the principal back. You have described? (5-4)
a. A secured credit card.
b. A HELOC
c. A credit builder loan
d. A secured federal student loan.
c. A credit builder loan
Which of the following is an advantage of using a credit card?
(5-1)
a. Using it will always negatively affect your credit score.
b. Since it is tied directly to your checking account, it prevents you from spending money you do not have.
c. If you need to carry a balance, the interest rates are generally quite low (less than 7%)
d. If you pay off your balance every month in full, it is similar to a short-term interest-free loan.
d. If you pay off your balance every month in full, it is similar to a short-term interest-free loan.
It is recommended that your monthly loan payments (INCLUDING your home mortgage) should not be over what percentage of your gross monthly income?
(5-2)
a. 10%
b. 16%
c. 20%
d. 36%
d. 36%
Which of the following loans is utilized, despite the poor terms, among those with poor credit and low savings/cash flow? (5-2)
a. Personal Loan
b. Home Equity Loan
c. Business Loan
d. Payday Loan
d. Payday Loan
What is a "soft" credit inquiry? (5-3)
a. When you apply for a loan, but don't actually borrow the money.
b. When you check your own credit score.
c. When you apply for a credit card.
d. When your credit card utilization is low.
b. When you check your own credit score.
What is a co-signer responsible for? (5-4)
a. The full amount owed if you don't pay the loan.
b. Providing their signature.
c. Providing their credit.
d. Providing the down payment.
a. The full amount owed if you don't pay the loan.
Which of the following is TRUE about credit cards?
(5-1)
a. One of the easiest ways to establish credit.
b. You have to pay interest on ALL purchases.
c. All credit cards have an annual fee.
d. Cash advances on a credit card have a lower APR than regular credit card purchases..
a. One of the easiest ways to establish credit.
It is recommended that your monthly loan payments (not including your home mortgage) should not be over what percentage of your net monthly income?
(5-2)
a. 10%
b. 16%
c. 20%
d. 36%
c. 20%
Which of the following loans would have the highest monthly payment?
(5-2)
a. Deferred
b. Amortized
c. Interest-Only
b. Amortized
When you start, you have a perfect credit score (since you’ve done nothing to damage it).
(5-3)
True
False
False
Which is not one of FICO's 5 credit score factors?
(5-3)
a. Payment history
b. New credit
c. Credit Utilization
d. Annual Income
d. Annual Income
__________was created to help consumers understand and compare credit card fees and rates.
(5-1)
a. Finance calculation method
b. Monthly statements
c. Best practices list
d. Schumer Box
d. Schumer Box
Secured loans typically have a higher interest rate than unsecured loans.
(5-2)
True
False
False
Which type of loan has principal payments “built in” so at the end of the loan term there is nothing further owed? (5-2)
a. Open-Ended Line of Credit
b. Deferred Loan
c. Amortized Loan
d. Interest-only Loan
c. Amortized Loan
Which of the following IS a category that impacts your credit score?
(5-3)
a. Monthly Loan Payment Amount
b. Balances in Bank accounts
c. Credit Card Utilization
d. Job History
c. Credit Card Utilization
Which of the following is NOT a way to build credit?
(5-4)
a. Become an authorized user on someone else's credit card.
b. Take out a federal student loan
c. Use your debit card responsibly.
d. Get a secured credit card.
c. Use your debit card responsibly.
Which type of loan has the consumer pay the ongoing interest but leaves the principal payment till the end of the loan? (5-2)
a. Open-Ended Line of Credit
b. Deferred Loan
c. Amortized Loan
d. Interest-only Loan
d. Interest-only Loan
Your credit score can range from? (5-3)
a. 300 - 850
b. 250 - 750
c. 300 - 800
d. 275 - 800
a. 300 - 850
If you have to go into bankruptcy, which type of bankruptcy allows you to keep most of your property and renegotiate your debt payments according to a court-approved repayment plan?
(5-5)
a. Chapter 7
b. Chapter 13
c. Both allow this
d. Neither allow this
b. Chapter 13