Question 1

The Fair Credit Billing Act sets the procedures for promptly correcting billing mistakes/errors.

Accepted Answer

A) True 
 B)False

Question 2

Revolving check credit is a:

Accepted Answer

A)  credit arrangement that has no extra costs.
B)  prearranged loan for a specified amount that you can use by writing a special check.
C)  credit arrangement that has no specific repayment plan.
D)  synonym for installment cash credit.
E)  synonym for single lump-sum credit.F) C) and D)
G) A) and B)

Question 3

The baby boom generation currently represents about 30 percent of the population but holds nearly ________ percent of the outstanding debt.

Accepted Answer

A)  80
B)  70
C)  60
D)  50
E)  40F) B) and D)
G) A) and E)

Question 4

"Shopaholics" and young adults are most vulnerable to misusing credit.

Accepted Answer

A) True 
 B)False

Question 5

The debt-to-equity ratio is:

Accepted Answer

A)  calculated by dividing total liabilities by net worth.
B)  calculated by dividing monthly debt payments by net monthly income.
C)  determined by dividing your assets by your liabilities.
D)  a useless ratio for determining your credit capacity.
E)  rarely used by creditors in determining credit worthiness.F) B) and D)
G) A) and E)

Question 6

If your credit application is denied,you:

Accepted Answer

A)  should sue the credit rating agency.
B)  should file a complaint against the merchant.
C)  have no legal right to know why.
D)  are entitled to know the specific reason you were denied credit.
E)  can reapply for credit after six months.F) C) and D)
G) None of the above

Question 7

Which one of the following is a disadvantage of using credit?

Accepted Answer

A)  Receiving advance notice of sales
B)  Temptation to overspend
C)  Avoiding the necessity of carrying cash
D)  Ease of returning merchandise
E)  Paying for several purchases with one monthly paymentF) A) and D)
G) A) and B)

Question 8

Paul Carter is applying for a loan from a bank.The bank is concerned because Paul is an airline pilot for United Airlines.The bank thinks that Paul may be laid off in the near future.Which one of the 5 Cs of credit is the bank concerned with?

Accepted Answer

A)  Character
B)  Capacity
C)  Capital
D)  Collateral
E)  ConditionsF) All of the above
G) C) and D)

Question 9

Which one of the following is important to do to help avoid credit card fraud?

Accepted Answer

A)  If you do not receive your billing statement,notify the company immediately
B)  Give out your credit card number over the phone
C)  Write your credit card number on the outside of envelopes
D)  Leave your credit card lying around anywhere
E)  If your billing statement is incorrect,ignore itF) A) and D)
G) A) and B)

Question 10

Most of the information in your credit file may be reported for only seven years.However,if you have declared personal bankruptcy,then this fact may be reported for 10 years.

Accepted Answer

A) True 
 B)False

Question 11

If you are denied credit,your first step should be to:

Accepted Answer

A)  increase your income and decrease your spending.
B)  reapply for credit.
C)  hire an attorney and file a suit against the creditor.
D)  check your credit file at the credit bureau.
E)  sue the credit bureau that provided the negative information.F) A) and C)
G) A) and B)

Question 12

Consumer credit:

Accepted Answer

A)  is currently a privilege of the affluent.
B)  dates back to colonial times.
C)  currently carries no finance charge.
D)  is not a major force in our economy.
E)  use has been declining in recent years.F) A) and E)
G) D) and E)

Question 13

Department stores and gasoline companies are good places to obtain your first credit card.

Accepted Answer

A) True 
 B)False

Question 14

Approximately how many credit card users would be classified as "convenience users" who generally pay off their balances in full each month?

Accepted Answer

A)  20%
B)  33%
C)  45%
D)  50%
E)  70%F) A) and B)
G) A) and C)

Question 15

The credit bureau cannot charge you a fee for a copy of your credit report if you request it within ________ days of being denied credit based on the information in the credit report.

Accepted Answer

A)  10
B)  20
C)  30
D)  40
E)  60F) B) and C)
G) A) and E)

Question 16

You may not be denied credit because you receive Social Security or public assistance.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following federal consumer credit laws requires creditors to promptly credit customers' accounts and to return overpayments if requested?

Accepted Answer

A)  Fair Credit Reporting Act
B)  Truth in Lending Act
C)  Equal Credit Opportunity Act
D)  Fair Credit Billing Act
E)  Consumer Credit Reporting Reform ActF) A) and B)
G) B) and E)

Question 18

In determining your credit capacity,you first provide for basic necessities within your budget,such as:

Accepted Answer

A)  furniture.
B)  home furnishings.
C)  mortgage or rent.
D)  automobile.
E)  durable goods.F) A) and D)
G) C) and E)

Question 19

Which of the following is a prearranged loan for a specified amount that you can use by writing a special check?

Accepted Answer

A)  Incidental credit
B)  Closed-end credit
C)  A bank line of credit
D)  Installment sales credit
E)  Overdraft protectionF) C) and D)
G) A) and D)

Question 20

Which federal consumer credit law places the maximum cost of a credit report at $8?

Accepted Answer

A)  Consumer Credit Reporting Reform Act
B)  Fair and Accurate Credit Transactions Act
C)  Fair Debt Collection Practices Act
D)  Fair Credit Billing Act
E)  Truth in Lending ActF) A) and B)
G) A) and C)

Exam 6: Introduction to Consumer Credit

"Shopaholics" and young adults are most vulnerable to misusing credit.

Correct AnswerverifiedShow Answer

The credit bureau cannot charge you a fee for a copy of your credit report if you request it within ________ days of being denied credit based on the information in the credit report.

Correct AnswerverifiedShow Answer

Paul Carter is applying for a loan from a bank.The bank is concerned because Paul is an airline pilot for United Airlines.The bank thinks that Paul may be laid off in the near future.Which one of the 5 Cs of credit is the bank concerned with?

Correct AnswerverifiedShow Answer

You may not be denied credit because you receive Social Security or public assistance.

Correct AnswerverifiedShow Answer

If your credit application is denied,you:

Correct AnswerverifiedShow Answer

The Fair Credit Billing Act sets the procedures for promptly correcting billing mistakes/errors.

Correct AnswerverifiedShow Answer

If you are denied credit,your first step should be to:

Correct AnswerverifiedShow Answer

Department stores and gasoline companies are good places to obtain your first credit card.

Correct AnswerverifiedShow Answer

Which federal consumer credit law places the maximum cost of a credit report at $8?

Correct AnswerverifiedShow Answer

Which one of the following is a disadvantage of using credit?

Correct AnswerverifiedShow Answer

Which one of the following is important to do to help avoid credit card fraud?

Correct AnswerverifiedShow Answer

Which of the following is a prearranged loan for a specified amount that you can use by writing a special check?

Correct AnswerverifiedShow Answer

Which of the following federal consumer credit laws requires creditors to promptly credit customers' accounts and to return overpayments if requested?

Correct AnswerverifiedShow Answer

Approximately how many credit card users would be classified as "convenience users" who generally pay off their balances in full each month?

Correct AnswerverifiedShow Answer

Most of the information in your credit file may be reported for only seven years.However,if you have declared personal bankruptcy,then this fact may be reported for 10 years.

Correct AnswerverifiedShow Answer

Revolving check credit is a:

Correct AnswerverifiedShow Answer

Consumer credit:

Correct AnswerverifiedShow Answer

The debt-to-equity ratio is:

Correct AnswerverifiedShow Answer

The baby boom generation currently represents about 30 percent of the population but holds nearly ________ percent of the outstanding debt.

Correct AnswerverifiedShow Answer

In determining your credit capacity,you first provide for basic necessities within your budget,such as:

Correct AnswerverifiedShow Answer

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