1. CREDIT MANAGEMENT TEST REVIEW

2. The interest or money that is charged a borrower for the use of credit is the ____. a.a. Finance chargec.Capital b.b. Collaterald.d. Principal

3. The amount borrowed is known as the ____. a.Finance chargec.Capital b.Collaterald.Principal

4. An all-purpose credit card, such as Visa, MasterCard, and Discover, is an example of which type of credit? a. 30-day credit agreement c.Closed-end credit b.Revolving credit agreement d.Service credit

5. Which of the following is not an advantage of using credit? a.a. It allows you to shop only at one store. c. It is safer than carrying large sums of money. b.b. It is convenient.d.It is useful in emergency situations.

6. The amount of time you are given to pay your bill without penalty is known as _____. a.a. Grace periodc.Deferred billing b.b. Overtimed.Free time

7. A loan for which the borrower pledges property to ensure repayment is a(n) ____. a.a. Installment purchase agreement c.Prorated loan b.b. Secured loand.Contract

8. Which of the following is not an example of service credit? a.a. Telephone servicesc.Rent b.b. Utility servicesd.Hairdressing services

9. It is illegal to discriminate on the basis of which of the following in granting or denying credit? a.a. Bank affiliationsc.Type of residence b.b. Occupationd.Marital status

10. Under the Consumer Credit Protection Act, if you report your credit card lost or stolen, your liability is limited to ____. a.a. $25c.$100 b.b. $50d.$200

11. Which of the following is not information that can be obtained through public records? a.a. Marriage license applications c.Lawsuits b.b. Bankruptciesd.Medical records

12. Property pledged to assure repayment of a loan is ____. a.Capitalc.Capacity b.Characterd.Collateral

13. It is lawful for creditors to ask you for ____. a.Your namec. Your employment history b.A list of assetsd.All of these

14. The most expensive way to figure the finance charge for the credit user is the ____. a. Average daily balance method c. Adjusted balance method b.Previous balance methodd.APR

15. Which of the following is the most serious step in dealing with credit problems? a.Debt adjustmentc.Credit counseling b.Bankruptcyd.The 20/10 Rule

16. The type of bankruptcy that allows businesses to continue operating under court supervision as they repay their restructured debts is ____. a.Involuntaryc.Chapter 7 b.Chapter 11d.Chapter 13

17. The debtor is ____. a. the person who borrows the money c. your accumulated assets b.the entity to whom you owe money d.assets pledged to assure repayment of a loan

18. The creditor is ____. a. the person who borrows the money c. your accumulated assets b.the entity to whom you owe money d.assets pledged to assure repayment of a loan

19. The part (one of the four “C’s”) of creditworthiness that pertains to a consumer’s legal ability to enter into a contract refers to as ____. a.a. Collateralc. Conditions b.b. Characterd.d. Capacity

20. Collateral is ____. a. the total amount you borrow c. your accumulated assets b.the fees that accrue each month on your credit card balance d.assets pledged to assure repayment of a loan

21. The principal is ____. a. the total amount you borrow c. your accumulated assets b.the fees that accrue each month on your credit card balance d.assets pledged to assure repayment of a loan

22. A legal process that allows part of your paycheck to be withheld for payment of a debt is ____. a.bankruptcyc.collection b.amortizationd.garnishment

23. Another name for The Consumer Protection Act of 1968 is____. a.Truth-In-Lending Lawc.Roe vs. Wade b.Consumer Credit Protection Act d.Equal Opportunity Act

24. An advantage of credit is ____. a.Purchasing powerc.Deferred billing b.Emergency fundsd.All of the above

25. An disadvantage of credit is ____. a.Conveniencec.Deferred billing b.Proof of purchased.Finance charges

26. The amount that you owe at any given time on your credit card is known as the ____. a.Finance chargec.Equity b.Line of creditd.Balance

27. APR stands for ____. a. Annual Percentage Rate c. Average Percentage Rate b.Annual Product Revenue d.Annual Profit and Revenue

28. A car loan is an example of ____. a.Revolving accountc.Debit card b.Line of creditd.Closed-end credit

29. A company that gathers, stores and sells credit information to business subscribers is a ____. a.Loan sharkc.Venture capitalist b.Federal bankd.Credit Bureau

30. Which of the following is one of the three national credit bureaus ____. a.Equifaxc.TransUnion b.Experiand.d. All of the above

31. The type of bankruptcy most often used for businesses or the very wealthy is _____. a.Chapter 7c.Chapter 13 b.Chapter 11d.None of the above

32. A reorganization form of bankruptcy for individuals that allows debtors to keep their property and use their income to pay a portion of their debts over three to five years is ____. a.Chapter 7c.Chapter 13 b.Chapter 11d.None of the above

33. A liquidation form of bankruptcy that wipes out most debts in exchange for the giving up most assets is ____. a.Chapter 7c.Chapter 13 b.Chapter 11d.None of the above

34. This type of bankruptcy is also known as “straight bankruptcy” ____. a.Chapter 7c.Chapter 13 b.Chapter 11d.None of the above

35. This type of bankruptcy is also known as “wage earners” bankruptcy ____. a.Chapter 7c.Chapter 13 b.Chapter 11d.None of the above

36. An agreement to have a service performed now and pay for it later is ____. a.Service creditc.Revolving credit b.Deferred creditd.None of the above

37. A agreement available to charge customers at a later date, or to begin installment payments at a later date is ____. a.Service creditc.Revolving credit b.Deferred billingd.None of the above

38. The complete record of your borrowing and repayment performance is summarized in your ____. a.Monthly billc.Report card b.Credit reportd.d. Checking account

39. A consumer should try to keep their credit score at or near ____. a.520c.700 b.100d.1000

40. What is a major cause of bankruptcy? a.Emotional spendingc.Poor planning b.Injury/Illness (Medical bills) d.All of the above

41. The five C’s of credit are used to determine ____. a. An individual’s credit worthiness c.And individual’s APR b.The finance charges that will apply to a credit card balance d.An individual’s net worth

42. List three advantages of credit:

43. List three things a creditor MUST publish for the consumer in their credit card terms:

44. List three sources of credit:

45. List the five Cs of credit:

46. List three items that show up on your credit report:

47. List three things that the Consumer Credit Protection Act (Truth in Lending Act of 1968) states that lenders must do:

48. List three responsibilities consumers have to themselves:

49. List three ways to safeguard your credit cards/identity:

50. List three assets that are exempt in bankruptcy (ie…the court will allow an individual to keep):

51. List three debts that are not dischargeable in bankruptcy: