When Bruce went to get an auto loan, he learned his credit score was low, which resulted in:

The interest rates on his loan will be higher.

How can you LEGALLY avoid paying interest when using a credit card?

Pay the balance in full every month before due date.

Jake’s was declined credit, because of negative credit. Which statement is most likely true?

He applied for 4 credit cards and a car loan within 6‐weeks.

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

Once a year, from each of the 3 credit reporting agencies.

Federal Truth in Lending Act says terms and conditions of credit cards must be posted where?

On a document called the Shumer box.

Which of the following is NOT considered an advantage to using a credit card?

Credit cards eliminate the need for savings.

What is one characteristic of open‐end (revolving) credit?

A down payment must be made before receiving the loan., Credit extended in advance, no need to apply each time used.

Sue was denied credit because she had no credit history. How does she go about building credit?

She should obtain a secured credit card.

Paying the minimum payment on a credit card every month will:

Final $$ paid will be much higher than the amount charged.

Becky no longer wants to use her Target store credit card. What should she do with the card?

Close the account by phone and writing, then destroy card.

Annual Percentage Rate & is charged each month if a balance.

Tuck is now paying a Penalty APR. What most likely may have happened?

While on vacation for 3 weeks, forgot to send in payment.

Which is NOT true about correcting errors or negative information found on your credit report:

Negative info can be removed by a financial specialist.

Visa and MasterCard are companies whose primary business is:

Offers banks/credit companies services & processes payments.

What factors determine or influence your credit score?

Your payment history and how much you owe on debts.

How would you describe closed-end or installment credit?

Equal payments required regularly until loan is repaid.

Jim is about to be 18 and plans to apply for a credit card. Which statement is true?

Can apply if he has a co‐signer or proof of income.

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CREDIT AND DEBIT - 2nd Period

30 termsStudBud Administration150 plays

Financial Fitness Credit and Debit Quiz!

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Questions 30

Answers

1
Property pledged to assure repayment of a loan is called:
Capital
Collateral
Capacity
Assets
2
Which of the following is NOT included in an individual’s credit report?
Bankruptcies and foreclosures.
Credit account balances.
Checking account balance.
Current and past addresses.
3
The least amount that must be paid on a credit card each is known as the:
Annual Percentage Rate
Minimum Payment
Payment Rate
Credit Limit
4
When Bruce went to get an auto loan, he learned his credit score was low, which resulted in:
An lower interest rate on his loan.
The interest rates on his loan will be higher.
Monthly loan payments will be low due to lower credit score.
Price of the car will be higher due to his low credit score.
5
How can you LEGALLY avoid paying interest when using a credit card?
Limit the use of credit cards to balance transfers only.
Pay the balance in full every month before due date.
There is no legal way for to avoid paying interest.
Pay the minimum balance every month before the due date.
6
Jake’s was declined credit, because of negative credit. Which statement is most likely true?
Jake pays his bills consistently and on time.
He applied for 4 credit cards and a car loan within 6‐weeks.
He has 2 store cards, a credit card, car loan, and mortgage.
Jake has received 3 traffic tickets in the past 2 months.
7
When may a person view his/her credit report for free?
A person may not review his/her credit report. It's private.
Once a year, from each of the 3 credit reporting agencies.
At any time and an unlimited number of times.
If a person has sufficient financial resources to pay.
8
The three (3) major credit bureaus or credit report agencies are TransUnion, Equifax, and
Equestrian
FICO
EqualCredit
Experian
9
Federal Truth in Lending Act says terms and conditions of credit cards must be posted where?
On a document called the Shumer box.
On the back of the credit card.
They do not need to be posted.
On the credit cards web site only.
10
Which of the following is NOT considered an advantage to using a credit card?
Credit cards eliminate the need for savings.
Credit cards offer rewards like air miles and cash rebates.
Credit cards are useful for emergencies.
Credit cards offer warranties for consumers.
11
What is one characteristic of open‐end (revolving) credit?
A down payment must be made before receiving the loan.
Allowed to borrow unlimited dollars, as long paid back.
Payments are equal and are required on a regular basis.
Credit extended in advance, no need to apply each time used.
12
Sue was denied credit because she had no credit history. How does she go about building credit?
Apply for a different type of credit, such as a store card.
She should obtain a secured credit card.
Acquire several credit cards to show she can manage them.
Re‐apply but this time include a letter of recommendation.
13
Which of the following is NOT found on a credit card statement?
List of Transactions
FICO Score
Summary of Account Activity
Notice of Interest Rate Changes
14
Paying the minimum payment on a credit card every month will:
Pay a large percentage of total balance owed every month.
Allow the cardholder to avoid paying any interest charges.
Final $$ paid will be much higher than the amount charged.
Allow you to pay off credit card in a decent amount of time.
15
Which is NOT an example of someone who reports information to a credit report agencies?
Medical Doctor
Credit Card Company
Utility Provider (Cable, Phone, etc.)
Landlord
16
A FICO credit score of 605 would be considered a:
Satisfactory B- credit rating.
Excellent A++ credit rating.
Unsatisfactory credit rating.
A score that does not allow a lender to issue credit.
17
The primary company that generates credit scores is:
Experian
Equifax
TransUnion
Fair Issac Corp. (FICO)
18
Becky no longer wants to use her Target store credit card. What should she do with the card?
Keep it in her wallet for identification purposes.
Put it in a safe deposit box.
Give it to a family member to take over the account.
Close the account by phone and writing, then destroy card.
19
Bankruptcy stays on a person's credit report for:
15 year
5 years
10 years
7 years
20
The person who borrows money by using credit is known as the:
Loaner
Payee
Debtor
Creditor
21
APR is
Annual Percentage Return and is calculated monthly.
Annual Percentage Rate & is charged each month if a balance.
Annual Payment Rate and is charged on each transactions.
Actual Payment Rate and is the true cost of credit.
22
Tuck is now paying a Penalty APR. What most likely may have happened?
Tuck has been paying it in full each of the last six months.
Intro interest rate ended, now the interest rate increases.
Went over the credit limit, but for only one week.
While on vacation for 3 weeks, forgot to send in payment.
23
Which is NOT true about correcting errors or negative information found on your credit report:
Negative credit stays on your credit report for seven years.
Negative info can be removed by a financial specialist.
Credit reporting agency has 30 days to investigate errors.
If error cannot be verified as correct it must be removed.
24
Amount of debt as percentage of yearly salary, and percentage of monthly payments on debt is:
Creditworthiness.
The VantageScore.
The 20/10 Rule.
Establishing the Fours C's of Credit.
25
A business hired to collect debt from delinquent borrower is called a:
Finance Company
Collection Agency
Credit Bureau
Credit Union
26
Visa and MasterCard are companies whose primary business is:
Setting interest rates, fees and penalties for credit cards.
Issuing credit scores to consumers.
Offers banks/credit companies services & processes payments.
Approving consumers for credit cards.
27
A person who agrees to be responsible for someone else's loans if they fail to repay is a
Copartner
Cofinancer
Conspirator
Cosigner
28
What factors determine or influence your credit score?
Your payment history and how much you owe on debts.
Your annual salary or hourly wage.
Employment history, number of times you have changed jobs.
How much you spend and where you spend it.
29
How would you describe closed-end or installment credit?
A continuous loan with a revolving balance.
Equal payments required regularly until loan is repaid.
Interest rates vary depending on the repayment history.
Credit limits vary depending on the loan balance.
30
Jim is about to be 18 and plans to apply for a credit card. Which statement is true?
Cannot obtain a credit card until he turns 21.
Can apply as long as he waits until after his 18th birthday.
Can apply if he has a co‐signer or proof of income.
Needs to use a special application since he is under 25.

CREDIT AND DEBIT - 2nd Period Flashcards | StudBud