Have an account?
Skip to Content
Build your own quiz
Life Skills
11th -
12thgrade
Chapter 7 Review: Choosing a Source of Credit: The Costs of Credit Alternatives
15 questions
Show Answers
See Preview
- 1. Multiple Choice
Buying on credit is almost always cheaper than paying cash.
True
False
- 2. Multiple Choice
Parents or family members are often the source of the least expensive loans.
True
False
- 3. Multiple Choice
You may be able to borrow at a lower interest rate if you accept a shorter-term loan.
True
False
- 4. Multiple Choice
The fairest method of calculating interest on a credit card is the average daily balance method.
True
False
- 5. Multiple Choice
An increasing number of bankruptcy filers are well-educated, middle-class people.
True
False
- 6. Multiple Choice
You have two choices in declaring personal bankruptcy: Chapter 7 and Chapter 13 bankruptcy.
True
False
- 7. Multiple Choice
A "float" period can be defined as:
the interest charged during one billing period.
a certain number of days during which no interest is charged.
a lump-sum loan from a credit union.
the principal balance due on a loan.
- 8. Multiple Choice
One of the drawbacks of borrowing from parents or family members is that such loans:
tend to be more expensive than other types of loans.
can complicate family relationships.
must be interest free.
are legally prohibited from establishing repayment dates and terms.
- 9. Multiple Choice
If you find that you cannot make your payments, the first thing you should do is:
skip town.
declare personal bankruptcy.
borrow from a loan shark to make the payment.
contact your creditors and try to work out a modified payment plan with them.
- 10. Multiple Choice
Which of the following is/are a signal of potential debt problems?
Paying only the minimum balance on credit card bills each month
Missing payments or paying late
Using savings to pay routine bills
Depending on overtime to meet everyday expenses
All of these are danger signals
- 11. Multiple Choice
Which method of payment is almost always cheaper than using credit?
Bank credit card
Cash
Store credit card
Cash advance on a Visa credit card
- 12. Multiple Choice
According to Fair Isaac Corporation (FICO), a personal bankruptcy can cause an immediate drop in your credit score of how many points?
100
150
210
260
- 13. Multiple Choice
Which type of debt would not be forgiven in a straight bankruptcy?
Credit card debt
Medical bills
Educational loans
Personal loans
- 14. Multiple Choice
The most expensive loans are available from:
finance companies
commercial banks
credit unions
friends/family
- 15. Multiple Choice
What is the most common reason why consumers are unable to pay their bills on time?
Medical expenses
Excessive use of credit
Fraudulent use of credit
Consumer fraud
- Answer choicesTagsAnswer choicesTags