Question 1

What is revolving check credit?

Accepted Answer

The answer of What is revolving check credit?...

Question 2

Which of the following is not a valid reason for using credit?
A)to pay for a medical emergency
B)to purchase a car for a homemaker returning to the workforce
C)to purchase an item now for less money than it will cost later
D)to pay for everyday living expenses
E)to pay for a college education

Accepted Answer

Using credit to pay for everyday living expenses can lead to a cycle of debt and financial instability. It is important to budget and save for these expenses instead.

Question 3

The Consumer Financial Protection Bureau receives an average of how many complaints about the credit bureaus every year?
A)5,000
B)25,000
C)36,000
D)42,000
E)50,000

Accepted Answer

The question asks for the average number of complaints about credit bureaus received by the Consumer Financial Protection Bureau each year. The answer is 36,000, as stated in choice C. Therefore, C is the best choice.

Question 4

Which federal consumer credit law requires issuers to display on monthly statements how long it would take to pay off the existing balance and the total interest cost if the consumer paid only the minimum due?
A)Fair Credit Reporting Act
B)Equal Credit Opportunity Act
C)Truth in Lending Act
D)Credit Card Accountability, Responsibility, and Disclosure Act
E)Fair Credit Billing Act

Accepted Answer

The Credit Card Accountability, Responsibility, and Disclosure Act (CARD Act) of 2009 requires issuers to display on monthly statements how long it would take to pay off the existing balance and the total interest cost if the consumer paid only the minimum due.

Question 5

How many alternatives do most consumers have in financing current purchases?
A)1
B)2
C)3
D)4
E)unlimited

Accepted Answer

Most consumers have at least three alternatives in financing current purchases: cash, credit, or leasing.

Question 6

According to the Credit CARD Act,your credit card company must send you a notice ___days before they can increase your interest rate.
A)30
B)45
C)50
D)60
E)90

Accepted Answer

The Credit CARD Act requires credit card companies to provide a 45-day advance notice before increasing the interest rate on a credit card.

Question 7

Which of the following is true of the baby boom generation?
A)represents about 30% of the population
B)holds nearly 60% of the outstanding debt
C)extensively uses debt
D)born between 1946 and 1964
E)all of these

Accepted Answer

The baby boom generation, born between 1946 and 1964, represents about 30% of the population, holds nearly 60% of the outstanding debt, and extensively uses debt.

Question 8

Credit bureaus obtain data from which of the following?
A)Banks
B)Finance companies
C)Merchants
D)Credit card companies
E)All of these

Accepted Answer

Credit bureaus obtain data from all of these sources: banks, finance companies, merchants, and credit card companies.

Question 9

What are the two basic types of credit? Give examples of both.

Accepted Answer

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Question 10

How can you protect yourself against credit card fraud?

Accepted Answer

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Question 11

Which of the following are most vulnerable to misusing credit?
A)Married couples
B)Shopaholics and young adults
C)Retired adults
D)Savers
E)None of the above

Accepted Answer

Shopaholics and young adults are most prone to misusing credit as they may lack financial responsibility and the discipline to avoid overspending. Married couples, retired adults, and savers are not necessarily vulnerable to misusing credit.

Question 12

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

Accepted Answer

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Question 13

What are the two general rules of measuring credit capacity?

Accepted Answer

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Question 14

Elizabeth has a monthly net income of $1,600.She has a house payment of $600 per month,a car loan with payments of $400 per month,a Visa card with payments of $75 per month,and a credit card with a local department store with payments of $125 per month.What is Elizabeth's debt payment-to-income ratio? Is she within range of what experts suggest you spend on consumer credit payments?

Accepted Answer

The answer of Elizabeth has a monthly net income of...

Question 15

Which of the following federal consumer credit laws requires creditors to promptly credit customers' accounts and to return overpayments if requested?
A)Fair Credit Reporting Act
B)Truth in Lending Act
C)Equal Credit Opportunity Act
D)Fair Credit Billing Act
E)Consumer Credit Reporting Reform Act

Accepted Answer

The Fair Credit Billing Act requires creditors to promptly credit customers' accounts for payments and returns, and to address billing errors in a timely manner. It also requires creditors to refund any overpayments within a certain period of time if requested by the customer.

Question 16

Which one of the following is not included in the 5 C's of credit?
A)Conditions
B)Cash flow
C)Collateral
D)Capacity
E)Character

Accepted Answer

The 5 C's of credit are Character, Capacity, Capital, Collateral, and Conditions. Cash flow is not one of the 5 C's, although it is an important factor that lenders may consider when evaluating a borrower's capacity to repay a loan.

Question 17

Which federal consumer credit law requires "credit repair" companies to give consumers a written contract that can be canceled within three business days?
A)Fair and Accurate Credit Transactions Act
B)Fair Debt Collection Practices Act
C)Fair Credit Billing Act
D)Truth in Lending Act
E)Consumer Credit Reporting Reform Act

Accepted Answer

The answer of Which federal consumer credit law requires "credit...

Question 18

Which of the following places new restrictions on credit card lending and eliminates certain fees?
A)Fair Credit Reporting Act
B)Credit Card Accountability, Responsibility, and Disclosure Act
C)Truth in Lending Act
D)Equal Credit Opportunity Act
E)Fair Credit Billing Act

Accepted Answer

The Credit Card Accountability, Responsibility, and Disclosure Act is commonly known as the Credit CARD Act. It placed new restrictions on credit card lending and eliminated certain fees, such as retroactive rate increases and over-limit fees.

Question 19

If you believe you have been refused credit due to discrimination,what are three steps you can take?

Accepted Answer

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Question 20

What are a few things to consider before you cosign a loan?

Accepted Answer

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Quiz 6: Introduction to Consumer Credit

What is revolving check credit?

Which of the following is not a valid reason for using credit?

The Consumer Financial Protection Bureau receives an average of how many complaints about the credit bureaus every year?

Which federal consumer credit law requires issuers to display on monthly statements how long it would take to pay off the existing balance and the total interest cost if the consumer paid only the minimum due?

How many alternatives do most consumers have in financing current purchases?

According to the Credit CARD Act,your credit card company must send you a notice ___days before they can increase your interest rate.

Which of the following is true of the baby boom generation?

Credit bureaus obtain data from which of the following?

What are the two basic types of credit? Give examples of both.

How can you protect yourself against credit card fraud?

Which of the following are most vulnerable to misusing credit?

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

What are the two general rules of measuring credit capacity?

Which of the following federal consumer credit laws requires creditors to promptly credit customers' accounts and to return overpayments if requested?

Which one of the following is not included in the 5 C's of credit?

Which federal consumer credit law requires "credit repair" companies to give consumers a written contract that can be canceled within three business days?

Which of the following places new restrictions on credit card lending and eliminates certain fees?

If you believe you have been refused credit due to discrimination,what are three steps you can take?

What are a few things to consider before you cosign a loan?