Question 1

Your bankcard has an APR of 18% and there is a 2% fee for cash advances. The bank starts charging interest on cash advances immediately. You get a cash advance of $600 on the first day of the month. You get your credit card bill at the end of the month. What is the total finance charge you will pay on this cash advance for the month? Assume each month has 30 days.

Accepted Answer

A)   $12
B)   $9
C)   $21
D)   $0
E)   $2Finance charge = [.02 × $600] + [(.18/12)  × $600] = $21F) B) and E)
G) C) and D)

Question 2

Sandra Jennings gets a loan from General Motors Acceptance Corporation. Which type of lending institution is this?

Accepted Answer

A)   Credit union
B)   Payday advance company
C)   Finance company
D)   Department store
E)   Commercial bankF) A) and D)
G) C) and E)

Question 3

In a Chapter 7 bankruptcy, the debtor:

Accepted Answer

A)   is required to draw up a petition listing all assets and liabilities.
B)   does not have to pay a filing fee.
C)   is called a "bankrupt."
D)   is absolved of alimony and child support payments.
E)   does not have to repay educational loans.F) B) and E)
G) All of the above

Question 4

The Rule of 78s demonstrates that a borrower pays:

Accepted Answer

A)   more interest at the beginning of the loan period.
B)   more interest at the end of the loan period.
C)   more interest in the middle of the loan period.
D)   less interest than indicated by the APR.
E)   equal amounts of interest throughout the loan.F) All of the above
G) B) and C)

Question 5

The average U.S. household has ______ credit cards.

Accepted Answer

A)   3
B)   5
C)   7
D)   9
E)   12F) D) and E)
G) C) and E)

Question 6

If you receive a phone call from a debt collector:

Accepted Answer

A)   hang up on him or her.
B)   expect follow-up written communication.
C)   dispute the fact that you owe the money.
D)   threaten the collector with a law suit.
E)   contact your attorney immediately.F) C) and E)
G) B) and C)

Question 7

Explain simple interest.

Accepted Answer

The answer of Explain simple interest....

Question 8

If you declare a Chapter 7 bankruptcy, you do not have to pay alimony, child support, or educational loans.

Accepted Answer

A) True 
 B)False

Question 9

According to Fair Isaac Corporation (FICO) , a personal bankruptcy can cause an immediate drop in your credit score of how many points?

Accepted Answer

A)   100
B)   150
C)   180
D)   210
E)   260F) B) and D)
G) A) and E)

Question 10

You can often obtain medium-priced loans from commercial banks and credit unions.

Accepted Answer

A) True 
 B)False

Question 11

"Keeping up with the Joneses" is one of the reasons for indebtedness.

Accepted Answer

A) True 
 B)False

Question 12

An increasing number of bankruptcy filers are well-educated, middle-class baby boomers.

Accepted Answer

A) True 
 B)False

Question 13

With the add-on interest method, interest is calculated on the full amount of the original principal.

Accepted Answer

A) True 
 B)False

Question 14

In open-end credit, what are the various systems creditors use to calculate the balance on which they assess finance charges?

Accepted Answer

The answer of In open-end credit, what are the various...

Question 15

Under the rule of 78s, loans for a year or less usually do not allow for a finance charge rebate.

Accepted Answer

A) True 
 B)False

Question 16

The consumer credit laws require that an advance notice be given before repossessing a car.

Accepted Answer

A) True 
 B)False

Question 17

If you borrow $100 at 10 percent simple annual interest and repay it in one lump-sum at the end of one year, you will repay:

Accepted Answer

A)   $100.
B)   $105.
C)   $110.
D)   $115.
E)   $120.F) A) and B)
G) All of the above

Question 18

Which one of the following is a local organization that provides debt counseling services for families and individuals?

Accepted Answer

A)   Credit bureau
B)   Chamber of Commerce
C)   Consumer Credit Counseling Service
D)   Internal Revenue Service
E)   Better Business BureauF) B) and C)
G) C) and D)

Question 19

The Consumer Credit Counseling Service (CCCS)  is affiliated with the:

Accepted Answer

A)   National Foundation for Consumer Credit.
B)   Federal Trade Commission.
C)   Better Business Bureau.
D)   U.S. Consumer Protection Agency.
E)   Federal Reserve Banks.F) C) and D)
G) None of the above

Question 20

You have the right to file your own bankruptcy case and represent yourself at all court hearings.

Accepted Answer

A) True 
 B)False

Exam 7: Choosing a Source of Credit: The Costs of Credit Alternatives

The average U.S. household has ______ credit cards.

Correct Answer
verified

You have the right to file your own bankruptcy case and represent yourself at all court hearings.

Correct Answer
verified

Sandra Jennings gets a loan from General Motors Acceptance Corporation. Which type of lending institution is this?

Correct Answer
verified

The Rule of 78s demonstrates that a borrower pays:

Correct Answer
verified

Which one of the following is a local organization that provides debt counseling services for families and individuals?

Correct Answer
verified

Under the rule of 78s, loans for a year or less usually do not allow for a finance charge rebate.

Correct Answer
verified

The Consumer Credit Counseling Service (CCCS) is affiliated with the:

Correct Answer
verified

Explain simple interest.

Correct Answer
verified

In a Chapter 7 bankruptcy, the debtor:

Correct Answer
verified

Correct Answer
verified

An increasing number of bankruptcy filers are well-educated, middle-class baby boomers.

Correct Answer
verified

If you declare a Chapter 7 bankruptcy, you do not have to pay alimony, child support, or educational loans.

Correct Answer
verified

If you borrow $100 at 10 percent simple annual interest and repay it in one lump-sum at the end of one year, you will repay:

Correct Answer
verified

According to Fair Isaac Corporation (FICO) , a personal bankruptcy can cause an immediate drop in your credit score of how many points?

Correct Answer
verified

"Keeping up with the Joneses" is one of the reasons for indebtedness.

Correct Answer
verified

With the add-on interest method, interest is calculated on the full amount of the original principal.

Correct Answer
verified

In open-end credit, what are the various systems creditors use to calculate the balance on which they assess finance charges?

Correct Answer
verified

The consumer credit laws require that an advance notice be given before repossessing a car.

Correct Answer
verified

You can often obtain medium-priced loans from commercial banks and credit unions.

Correct Answer
verified

If you receive a phone call from a debt collector:

Correct Answer
verified

Exam 7: Choosing a Source of Credit: The Costs of Credit Alternatives

The average U.S. household has ______ credit cards.

Correct AnswerverifiedShow Answer

You have the right to file your own bankruptcy case and represent yourself at all court hearings.

Correct AnswerverifiedShow Answer

Sandra Jennings gets a loan from General Motors Acceptance Corporation. Which type of lending institution is this?

Correct AnswerverifiedShow Answer

The Rule of 78s demonstrates that a borrower pays:

Correct AnswerverifiedShow Answer

Which one of the following is a local organization that provides debt counseling services for families and individuals?

Correct AnswerverifiedShow Answer

Under the rule of 78s, loans for a year or less usually do not allow for a finance charge rebate.

Correct AnswerverifiedShow Answer

The Consumer Credit Counseling Service (CCCS) is affiliated with the:

Correct AnswerverifiedShow Answer

Explain simple interest.

Correct AnswerverifiedShow Answer

In a Chapter 7 bankruptcy, the debtor:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An increasing number of bankruptcy filers are well-educated, middle-class baby boomers.

Correct AnswerverifiedShow Answer

If you declare a Chapter 7 bankruptcy, you do not have to pay alimony, child support, or educational loans.

Correct AnswerverifiedShow Answer

If you borrow $100 at 10 percent simple annual interest and repay it in one lump-sum at the end of one year, you will repay:

Correct AnswerverifiedShow Answer

According to Fair Isaac Corporation (FICO) , a personal bankruptcy can cause an immediate drop in your credit score of how many points?

Correct AnswerverifiedShow Answer

"Keeping up with the Joneses" is one of the reasons for indebtedness.

Correct AnswerverifiedShow Answer

With the add-on interest method, interest is calculated on the full amount of the original principal.

Correct AnswerverifiedShow Answer

In open-end credit, what are the various systems creditors use to calculate the balance on which they assess finance charges?

Correct AnswerverifiedShow Answer

The consumer credit laws require that an advance notice be given before repossessing a car.

Correct AnswerverifiedShow Answer

You can often obtain medium-priced loans from commercial banks and credit unions.

Correct AnswerverifiedShow Answer

If you receive a phone call from a debt collector:

Correct AnswerverifiedShow Answer

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