1. Credit Card and Basic Loan Review

2. A cash advance A. Increases a borrower's credit limit.
B. Is the cheapest way to obtain money when away from home.
C. Usually is obtained from a bank.
D. Accrues interest charges beginning the day the cash advance is made.

3. When used effectively, credit can result in
A. Default.
B. Loss of creditworthiness.
C. Financial loss.
D. Improved Life Style

4. Which of the following is NOT correct?
A. Using credit is appropriate to pay for medical emergencies.
B. Using credit can increase the amount of money that will be available to spend in the future.
C. Using credit sometimes occurs automatically, such as for water or electricity usage.
D. Using credit cards usually makes returning merchandise without a receipt easier.

5. A typical grace period for many credit card issuers is
A days.
B days.
C days.
D days.

6. Many think that perhaps the greatest disadvantage of using credit is
A. The temptation to overspend.
B. The convenience offered instead of using cash.
C. The float from using credit.
D. The increase in total purchasing power.

7. Which of the following is an example of closed-end credit that is a secure loan?
A. A mortgage loan.
B. A department store credit card.
C. Overdraft protection.
D. A bank line of credit.

8. A loan that must be repaid in total on a specified day, usually within 30 to 90 days, is
A. An installment cash credit.
B. A bank line of credit.
C. Open-end credit.
D. Single lump-sum credit.

9. A line of credit is A. The equal payments required for one-time loans.
B. The loan amount for installment cash credit.
C. The maximum loan amount for closed-end credit.
D. The maximum dollar amount of credit the lender has made available.

10. The periodic charge or APR for the use of credit is
A. A line of credit.
B. A revolving check credit.
C. Interest.
D. A grace period.

11. Which of the following electronically subtracts money from your savings or checking account to pay for goods and services?
A. A credit card
B. Closed-end credit
C. A debit card
D. A gift card

12. Experts suggest that the debt payments-to-income ratio should be a maximum of

13. The question "Will you repay the loan?" relates to
A. Character.
B. Capacity.
C. Capital.
D. Collateral.

14. The question "What are your assets and net worth?" relates to
A. Character.
B. Capacity.
C. Capital.
D. Collateral.

15. The use of property or savings to secure a loan relates to
A. Character.
B. Capacity.
C. Capital.
D. Collateral.

16. A loan officer is examining whether or not to will offer you a loan today. Specifically, she is examining your income and debts. Which of the five Cs is the loan officer reviewing?
A. Character
B. Capacity
C. Capital
D. Collateral

17. A credit report includes
A. Credit history.
B. Assumptions made by credit rating agencies.
C. Credit score.
D. Credit expectations.

18. The finance charge for credit includes all of the following except
A. Interest costs.
B. Services charges.
C. Credit-related insurance premiums.
D. The amount borrowed.

19. The APR is the percentage cost of credit on a(n) ______________ basis.
A. monthly
B. quarterly
C. semi-annual
D. annual

20. The Credit CARD Act of 2009 requires consumers under the age of 21 to either have an adult cosigner or:
A. be attending college full-time. B. be attending college at least half-time. C. be a recent college graduate. D. have proof of personal income sufficient to make the payments.

21. Credit reports contain which of the following items?
A. payment history B. credit limit and high balance C. comments regarding an account closing D. all of the items in the other answers

22. If Vince charged $200 on his credit card with 18% APR and he paid his balance in full within the grace period, how much was he required to pay?
A. $3.00
B. $18.00
C. $182.00
D. $200.00

23. Which one of the following has the greatest effect on your FICO score?
A. length of credit history B. amount owed relative to available credit C. new credit D. history of timely payments

24. An excellent credit score is defined as having a FICO score of:
A. 950 or better. B. 800 or better. C. 750 or better. D. 200 or less.

25. Which of the following parties may check your credit score?
lending banks
prospective employers
insurance companies
All of the above

26. A significant benefit associated with using a credit card is that
you have the right to return any merchandise purchased with a credit card within 30 days of the purchase.
your losses are limited to $50 if the card is lost or stolen.
you can easily incur debt at attractive interest rates.
the interest paid is a deduction on your federal income taxes.

27. One difference between a debit card and a credit card is that
payments made with a debit card are immediately deducted from your bank account.
debit cards can only be used for large transactions.
debit cards provide better consumer protection.
debit cards generate unsecured debt.

28. Which is an example of an unsecure loan?
Personal Loan
Student Loan
Mortgage
Auto Loan

29. Which of the following institutions makes loans based on the value of tangibles possessions, such as jewelry and collectibles?
A. life insurance company
B. finance company
C. mortgage company
D. pawnshop

30. A revolving credit account is a(n)
open-end account.
installment loan account.
equity account.
closed-end account.