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- 1. Multiple Choice
A card issued by a bank that allows users to finance a purchase.
credit card
debit card
- 2. Multiple Choice
There are three credit bureaus: Experian, TransUnion and Equifax.
true
false
- 3. Multiple Choice
Which of the following is a sign that your identity may have been stolen?
A call from a collection agency about a debt you didn’t incur
Bank and billing statements don’t arrive on time
Your credit report shows accounts you didn’t open
all of the above
- 4. Multiple Choice
Teens are a huge target of credit card companies today.
true
false
- 5. Multiple Choice
A long-term rental agreement on a car; a form of secured long-term debt.
loan
lease
- 6. Multiple Choice
A long-term rental agreement on a car; a form of secured long-term debt.
loan term
loan financing
- 7. Multiple Choice
You can and should obtain a free copy of your credit report annually in order to check for any suspicious activity.
true
false
- 8. Multiple Choice
Individual account information is removed from your credit report seven years after the last activity on the account, except for Chapter 7 bankruptcy, which stays on your credit report for:
1 year
10 years
5 years
20 years
- 9. Multiple Choice
What is paycheck garnishment?
A court-ordered attachment that allows a lender to take monies owed directly from a borrower’s paycheck
Process of taking something back for failure to make payments
Process by which the holder of a mortgage sells the property of a homeowner who has fallen behind on payments
A legal procedure for dealing with debt problems of individuals and businesses
- 10. Multiple Choice
A detailed report of an individual’s credit history.
credit report
cash flow statement
- 11. Multiple Choice
The Federal Trade Commission (FTC) is one of many U.S. federal agencies that regulate the consumer credit system and enforce the laws related to it.
true
false
- 12. Multiple Choice
What factors affect a credit score?
type of debt
new debt
duration of debt
all of the above
- 13. Multiple Choice
If you do not have a FICO score, what factors will determine whether or not you qualify for a mortgage?
History of rental and utility payments
Spending history
You cannot get a mortgage without a credit history
none of the above
- 14. Multiple Choice
A yearly fee that’s charged by the credit card company for the convenience of the credit card.
interest rate
annual fee
- 15. Multiple Choice
Which of the following is not a factor in determining a FICO score?
Getting a personal loan from a bank
Using credit cards
Paying cash for all purchases
Taking out a mortgage on a house
- 16. Multiple Choice
It is okay to use a credit card if you pay it off every month.
true
false
- 17. Multiple Choice
Preferred method of debt repayment; includes a list of all debts organized from smallest to largest balance; minimum payments are made to all debts except for the smallest, which is attacked with the largest possible payments.
credit counseling
debt snowball
- 18. Multiple Choice
You must establish credit in order to buy a house
true
false
- 19. Multiple Choice
Co-signing a loan is a good way to help a friend or relative
true
false
- 20. Multiple Choice
Under the Fair Credit Reporting Act (FCRA), any person or organization may check a person’s credit information without having a legitimate need.
true
false
- 21. Multiple Choice
Cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan.
annual percentage rate (APR)
annual fee
- 22. Multiple Choice
Which of the following is not recommended in the debt snowball method of getting out of debt?
List your debts in order from smallest to largest balance and focus on paying the smallest debt off first.
Every extra dollar you get should be thrown at the largest debt first.
Attack your debt with intensity.
every time you pay off a debt, you add its old minimum payment to your next debt payment.
- 23. Multiple Choice
You need to have a credit card to rent a car or check in to a hotel
true
false
- 24. Multiple Choice
Which of the following statements is false?
Prior to the FCRA, consumers were unable to challenge errors in their credit reports.
Under FCRA, consumers are allowed to receive one free credit report every five years.
The U.S. Congress enacted the Fair Credit Reporting Act to address concerns over consumer credit report accuracy, privacy and fairness.
Under FCRA, creditors must notify consumers if they deny credit based on a credit report file, and they must also tell the consumer which of the three credit bureaus provided the report.
- 25. Multiple Choice
a decrease or loss in value.
depreciation
inflation
- 26. Multiple Choice
Which of the following is not a good idea for getting out of debt?
quit borrowing money
get a part-time job or work overtime
sell something
borrow money from your parents to pay for the debt
- 27. Multiple Choice
If you are a victim of identity theft, you are only responsible for paying back half of the debt.
true
false
- 28. Multiple Choice
When a person owes more on an item (like a car or house) than it is worth, the person is said to be _________ on the loan.
secured
upside down
- 29. Multiple Choice
Which of the following best summarizes how the use of a credit card for purchases instead of cash can change one’s spending behavior?
Spending behavior does not matter as long as you pay off the credit card balance each month.
Studies show that there is no change in spending behavior whether a person uses cash or credit.
People typically spend less when they know that they are earning credit card ʺrewards.ʺ
Studies show that consumers typically spend more when using credit as opposed to cash purchases.
- 30. Multiple Choice
Which of the following things cannot be done with a debit card but can be done with a credit card?
go into debt
rent a car
purchase something online
purchase an airline ticket
- 31. Multiple Choice
An interest rate charged to a customer during the early stages of a loan; the rate often goes up after a specified period of time.
introductory rate
new customer fee
- 32. Multiple Choice
Which of the following is the most cost-effective option for purchasing a home?
Get a 15-year mortgage with a 5% down payment.
get a 30-year mortgage so that you can get the lowest possible payments.
The most ideal way to buy a house is with 100% down; if that is not an option, you should get no more than a 15-year, fixed rate mortgage with a down payment of at least 10%.
Get a 30-year mortgage with a 20% down payment.
- 33. Multiple Choice
Which of the following is not a recommended step in the Drive Free method of purchasing a car?
Plan your purchase in advance using the sinking fund method of saving.
Place your savings in a mutual fund so that your money can make more money.
Start with an inexpensive car and gradually move up in car value as your savings increases.
Explore new car dealerships for the best interest rate.
- 34. Multiple Choice
Which of the following is not a credit myth?
The lottery and other forms of gambling will make you rich.
You have ʺarrivedʺ financially once you get approved for a credit card.
Debt is a tool and should be used to create prosperity.
Borrowing money can have serious consequences and prevent you from building wealth.
- 35. Multiple Choice
A credit score is intended to measure:
Your financial success
The risk of your not repaying debt
Your income level
The amount of money you have in the bank
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