Income $5000 month; Student loan $120; Car loan $300. Which of the following is true?

Debts are within safe debt load for that income

Paying the minimum on a credit card every month will:

Make final payment a lot higher than original charge

What is a low credit score likely to mean?

Interest rate on loan will be higher

What should Perry consider first in the planning to buy a car?

Evaluate the opportunity cost and trade-offs to buying a car

Which is most likely to lead to a negative credit history?

Apply for 4 credit cards and a car loan in past 6 weeks

Carson's wallet was stolen. Which would an identity theft probably NOT do?

Take a college admissions test with Carson's name

Which is likely to result in paying a Penalty APR?

She forgot to send payments while traveling overseas

Which explains the importance of understanding the process of borrowing money?

When borrowing, you are spending future income, Builds strong credit history because requires credit report

A general rule to minimize identity theft when dealing with credit reports?

Check each credit report at least once per year

When applying for a credit card, which statement is true if applicant is under 18 years of age?

Need a co-signer or proof of sufficient income for repayment

A good way to develop a positive credit history

Maintain reasonable amounts of available credit

When may a person view his/her credit report for free?

Once a year, from each of the 3 main credit report agencies

How can you LEGALLY avoid paying interest on a credit card?

Pay in full monthly before due date

Which is an act of identity theft?

Wrongfully acquiring/using someone's personal identification

To keep credit within safe boundaries remember to:

Keep total debt, NOT including house, under 20% net income

What is the best thing to do with a credit card you no longer want to use?

Close account by phone & writing; destroy card

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Credit Basics- 8th Period

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Spending and credit review

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Questions 25

Answers

1
Income $5000 month; Student loan $120; Car loan $300. Which of the following is true?
Debts are within safe debt load for that income
Total debt exceeds recommended safe debt load
Student loan is within safe range; car is not
Subtract student loan from car payment to determine
2
Paying the minimum on a credit card every month will:
allow card holder to avoid paying any interest charges
Help pay off card in decent amount of time
pay a large percent of total balance owed
Make final payment a lot higher than original charge
3
What is a low credit score likely to mean?
Loan payment will be lower
Purchase price of what he needs loan for will be higher
Interest rate on loan will be higher
Interest rates on loan will be lower
4
What is the Annual Percentage Rate?
1.65%
0.54%
20.7%
19.8%
5
What should Perry consider first in the planning to buy a car?
Rank product features in order of importance
Calculate the cost of ownership
Research selelrs to see who to buy from
Evaluate the opportunity cost and trade-offs to buying a car
6
Why is investing in product research important for major purchases?
research enhances satisfaction
research decreases satisfaction
research is too time consuming
only necessary for major purchases
7
Which is the best way to begin to build a positive credit history?
Get a letter of recommendation to take to bank for loan
Apply for a credit card, not a bank loan
Obtain a secured credit card
Acquire several credit cards
8
Which is most likely to lead to a negative credit history?
Pay bills consistently and on time
Get 3 traffic tickets i past 2 months
Hold 2 store credit cards, Mastercard, car & house loan
Apply for 4 credit cards and a car loan in past 6 weeks
9
Carson's wallet was stolen. Which would an identity theft probably NOT do?
Make purchases with Carson's credit card
Use Carson's name during an arrest
Take a college admissions test with Carson's name
Rent an apartment with Carson's name
10
Which is likely to result in paying a Penalty APR?
Exceeded credit limit for 1 week until paid bill
Lower introductory rates expired; now paying higher fee
She forgot to send payments while traveling overseas
Paid in full each of last 6 months
11
Which explains the importance of understanding the process of borrowing money?
When borrowing, you are spending future income
Strongly affects present self; less impact on future self
Builds strong credit history because requires credit report
Borrowing is part of a responsible financial plan
12
What is a safety tip for online shopping?
Use a credit card
Hide credit card number before submitting payment
Shred sales receipts as soon as item is purchased/received
Use a debit card
13
A general rule to minimize identity theft when dealing with credit reports?
Wait 60 days to dispute any wrong info
Keep credit reports in easily accessible location
Check each credit report at least once per year
Report any mistakes to only one credit report agency
14
Which is LEAST LIKELY to be used by scammers?
Credit card numbers
Bank account numbers
Phone numbers
Driver's license numbers
15
To decrease risk of fraud when using your credit cards, which strategy is best?
Sign back with "SEE ID"
Carry all credit cards with you so they don't get lost
Keep credit reports easy to find
Give account numbers over Internet rather than over phone
16
Which is NOT included in an individual's credit report?
Bankruptcies and foreclosures
Current and past addresses
Medical information
Account balances
17
When applying for a credit card, which statement is true if applicant is under 18 years of age?
Must wait until turning 18
Cannot obtain one until you turn 21 years old
Those under 21 years old must use special application
Need a co-signer or proof of sufficient income for repayment
18
What is the maximum amount of disposable income a person should borrow?
80%
100%
50%
20%
19
A good way to develop a positive credit history
Maintain reasonable amounts of available credit
Open credit accounts in parents' names
Pay cash for all purchases
Have one type of credit account
20
When may a person view his/her credit report for free?
If a person has sufficient financial resources
At any time and for an unlimited number of times
A person may not review credit report
Once a year, from each of the 3 main credit report agencies
21
How can you LEGALLY avoid paying interest on a credit card?
Use credit cards to balance transferes only
No legal way to avoid paying interest
Pay in full monthly before due date
Pay minimum balance monthly
22
Which is an act of identity theft?
Taking identity of another as inspiration for a costume
Permission to use parents' credit card
Wrongfully acquiring/using someone's personal identification
Having same name as another person
23
To keep credit within safe boundaries remember to:
Keep total debt, NOT including house, under 40% net income
Keep total debt, including house/car , under 20% net income
Keep total debt, NOT including house, under 20% net income
Keep total debt, including house/car, under 40% net income
24
What is the best thing to do with a credit card you no longer want to use?
Keep in in wallet for proof of ID
Close account by phone & writing; destroy card
File away to use later
Give it to a family member so credit score is not affected
25
Which will NOT make you an easy target of identity theft?
sing a computer without updated spyware
Responding to an email from your despository institution
Throw mail in garbage
Pay cash for a movie ticket

Credit Basics- 8th Period Flashcards | StudBud