Question 1

Which one of the following would not typically be closed-end credit?

Accepted Answer

A)  home mortgage
B)  installment loan to purchase new furniture
C)  line of credit from your bank
D)  automobile loan
E)  single lump-sum credit loan due in 90 daysF) B) and C)
G) B) and D)

Question 2

If someone has stolen your identity,the Federal Trade Commission recommends that you contact the fraud departments of each of the three major credit bureaus.

Accepted Answer

A) True 
 B)False

Question 3

What are the three most common types of closed-end credit?

Accepted Answer

The answer of What are the three most common types...

Question 4

Single lump-sum credit is a loan that must be repaid in total on a specified day,usually within 30 to 90 days.

Accepted Answer

A) True 
 B)False

Question 5

Which federal credit law sets the procedure for promptly correcting billing mistakes?

Accepted Answer

A)  Fair Debt Collection Practices Act
B)  Equal Credit Opportunity Act
C)  Fair Credit Billing Act
D)  Fair Credit Reporting Act
E)  Truth in Lending ActF) C) and E)
G) A) and B)

Question 6

Closed-end in credit is used for a specific purpose and involves a specified amount.

Accepted Answer

A) True 
 B)False

Question 7

By paying cash for a purchase,you:

Accepted Answer

A)  forgo the opportunity to keep the cash in an interest-bearing account.
B)  always get a cash discount.
C)  can build a better credit rating.
D)  get better personal service from store employees.
E)  have a better selection of goods than if you use credit.F) D) and E)
G) A) and D)

Question 8

With an open-end credit,you pay back one-time loans in a specified period of time in equal amounts.

Accepted Answer

A) True 
 B)False

Question 9

Consumer credit is based on trust in people's ability and willingness to pay bills when due.

Accepted Answer

A) True 
 B)False

Question 10

When you complain about your billing error,the creditor must acknowledge your letter within ____________ days.

Accepted Answer

A)  10
B)  20
C)  30
D)  60
E)  90F) D) and E)
G) A) and B)

Question 11

Jennifer Garner purchases a sofa,love seat and reclining chair for her family room and will make payments of $65 per month for the next twenty-four months.What type of credit did Jennifer use?

Accepted Answer

A)  installment sales credit
B)  installment cash credit
C)  single lump sum credit
D)  revolving credit
E)  incidental creditF) A) and E)
G) A) and D)

Question 12

If you think that your bill is wrong,you should first:

Accepted Answer

A)  contact the local credit bureau and inform it of the billing error.
B)  complain to the Better Business Bureau.
C)  contact your state consumer protection agency.
D)  notify the creditor in writing within 60 days after the bill was maileD.
E)  contact your attorney to settle the matter.F) A) and B)
G) A) and E)

Question 13

Most consumers have only one choice in financing current purchases.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A)  receiving advance notice of sales
B)  ease of overspending
C)  avoiding the necessity of carrying cash
D)  ease of returning merchandise
E)  having a record of all purchasesF) A) and B)
G) C) and E)

Question 15

In evaluating your credit application,a lender may:

Accepted Answer

A)  ask your age.
B)  want to know if you are on public assistance.
C)  require your marriage certificate.
D)  ask if you are married or divorceD.
E)  ask your race and nationality.F) B) and E)
G) B) and D)

Question 16

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) A) and C)
G) A) and D)

Question 17

The credit cardholders who pay off their balances in full each month are known as convenience users.

Accepted Answer

A) True 
 B)False

Question 18

Which one of the following is not a source that provides data to credit bureaus?

Accepted Answer

A)  banks
B)  finance companies
C)  merchants
D)  court records
E)  Internal Revenue ServiceF) A) and C)
G) None of the above

Question 19

The Equal Credit Opportunity Act is very specific about how a person's age may be used in credit decisions.

Accepted Answer

A) True 
 B)False

Question 20

Which one of the following would not be a good use of a home equity loan?

Accepted Answer

A)  paying for college
B)  buying a new boat
C)  putting a new roof on your house
D)  paying medical bills
E)  adding a deck on the back of your houseF) D) and E)
G) A) and C)

Exam 6: Introduction to Consumer Credit

Consumer credit is based on trust in people's ability and willingness to pay bills when due.

Correct AnswerverifiedShow Answer

When you complain about your billing error,the creditor must acknowledge your letter within ____________ days.

Correct AnswerverifiedShow Answer

Which one of the following is not a source that provides data to credit bureaus?

Correct AnswerverifiedShow Answer

The Equal Credit Opportunity Act is very specific about how a person's age may be used in credit decisions.

Correct AnswerverifiedShow Answer

If someone has stolen your identity,the Federal Trade Commission recommends that you contact the fraud departments of each of the three major credit bureaus.

Correct AnswerverifiedShow Answer

What are the three most common types of closed-end credit?

Correct AnswerverifiedShow Answer

Most consumers have only one choice in financing current purchases.

Correct AnswerverifiedShow Answer

In evaluating your credit application,a lender may:

Correct AnswerverifiedShow Answer

Which federal credit law sets the procedure for promptly correcting billing mistakes?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

With an open-end credit,you pay back one-time loans in a specified period of time in equal amounts.

Correct AnswerverifiedShow Answer

Jennifer Garner purchases a sofa,love seat and reclining chair for her family room and will make payments of $65 per month for the next twenty-four months.What type of credit did Jennifer use?

Correct AnswerverifiedShow Answer

The credit cardholders who pay off their balances in full each month are known as convenience users.

Correct AnswerverifiedShow Answer

Closed-end in credit is used for a specific purpose and involves a specified amount.

Correct AnswerverifiedShow Answer

The debt-to-equity ratio is:

Correct AnswerverifiedShow Answer

Which one of the following would not be a good use of a home equity loan?

Correct AnswerverifiedShow Answer

Which one of the following would not typically be closed-end credit?

Correct AnswerverifiedShow Answer

By paying cash for a purchase,you:

Correct AnswerverifiedShow Answer

If you think that your bill is wrong,you should first:

Correct AnswerverifiedShow Answer

Single lump-sum credit is a loan that must be repaid in total on a specified day,usually within 30 to 90 days.

Correct AnswerverifiedShow Answer

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