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Exam 6: Using Credit

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Question 1

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It is necessary to give your Social Security number for identification when using a credit card.

A) True
B) False

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Question 2

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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. Generally speaking, the interest rates on credit cards are [ lower | higher ] than any other form of consumer credit.

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Question 3

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An individual who has a steady source of income and a reasonable chance to repay debts would choose Chapter 13 rather than Chapter 7 of the U.S. Bankruptcy Code.

Most lenders immediately will _____ the first time that you have difficulty meeting your loan payments.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. About 70% of those filing personal bankruptcy choose Chapter [ 7 | 13 ] of the U.S. Bankruptcy Code.

The market value of your house is $175,000, and you have a first mortgage balance of $100,000. If a lender requires an 80% loan-to-market value ratio, how large could your home equity loan be?

Which of the following cards are issued as a form of credit by department stores and oil companies?

An improper use of extended credit is buying:

Credit card issuers must disclose to credit applicants the annual percentage rate (APR) that they charge.

Your credit bureau file often includes information about your political and religious affiliations.

A straight bankruptcy:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. The least expensive method of determining finance charges on revolving credit would be [ ADB, including new purchases | ADB, excluding new purchases ].

Lindsey has a job with a monthly take-home pay of $3,500. Using lenders ' guidelines for maximum debt safety ratio, what maximum debt burden per month can she assume? (Show all work.)

Tamara is not a big spender and rarely has a credit card balance over $500. What should Tamara look for in a credit card given the way she uses one?

Which of the following modes of identity theft involves thieves obtaining your personal information from financial institutions and other sources under false pretenses?

A retail charge card can be accessed by writing checks against demand deposit.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. Rebate cards are most useful for consumers who charge a lot and [ carry | do not carry ] high monthly balances.

The majority of persons filing for bankruptcy choose Chapter 7 of the U.S. Bankruptcy Code.

Always paying cash helps in establishing a high level of creditworthiness.

The FICO credit scoring system assigns points according to: