Question 1

Define two of the following:
a.Grace period.
b.Line of credit.
c.Interest.

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a.Grace period.
b.Line of...

Question 2

Think about how you intend to use credit.Discuss the factors you would find most important in your choice of a credit card.Why?

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Question 3

What steps should be taken if you find an error in your credit file?

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Question 4

Juan purchased some new appliances and took out a $1,600 loan from the bank.The bank is using the simple interest formula for this two-year,9% loan.What is the total amount he will pay when the loan is due?

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Question 5

What are the 5 Cs of credit?

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Question 6

Timothy Carter has net monthly income of $3,800.He has a monthly auto loan payment of $350,a student loan payment of $145,a mortgage payment of $1,200,and a credit card minimum payment of $45.What is his debt-payments-to-income ratio?

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Question 7

Rachel Johnson went to the ATM to withdraw $200 cash with her debit card.She inadvertently pulled out her credit card instead,not realizing the expenses for cash advances.If her credit card company charges a cash advance fee of 4% and interest at 22% APR,what are the total fees she will pay for her mistake?

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Question 8

Acme Home Lending offers home equity loans of up to 75% of the home value for its customers.If Sally Johnson has a home valued at $180,000 and a current mortgage of $125,000,how much can she borrow in a home equity loan from Acme?

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Question 9

Define two of the following.Provide an example of each:
a.Credit card.
b.Debit card.
c.Gift card.
d.Smart card.
e.Travel and entertainment card.

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Question 10

Liz Brown is purchasing a used car for $10,000.She has a down payment of $2,000 and needs to borrow $8,000.Which of the following three credit arrangements would you suggest she accept?

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Question 11

Explain redlining.

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Question 12

Francisco Juarez wants to take out a $15,000 loan to purchase a car.What is his approximate APR if he will make 60 monthly payments and his total interest paid is $5,000?

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Question 13

Contrast a credit card with a debit card.

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Question 14

List at least five items that can appear in a credit file.

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Question 15

Patrick Guitman has net annual income of $48,000.He has monthly payments as follows:

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Question 16

Brenda Callaway wants to borrow money to purchase some new appliances.The bank offered her a $1,200 loan at 10% simple interest with an upfront service charge of $35.If she is required to pay the entire loan back at the end of one year,what is her total finance charge?

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Question 17

Why is the APR for a 10% loan that is repaid on a monthly basis higher than the APR for a loan that is repaid all at once?

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Question 18

Meera Liu approached a lender about a home loan.What are some factors that the lender could NOT legally hold against her when determining whether she should receive the loan?

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Question 19

Marissa Christianson decided to use a cash advance from her Visa card to purchase $125 in lottery tickets.Unfortunately,she was not a winner.In addition,her credit card increased her APR to 24%.The fine print on her statement showed that she pays a 4% cash advance fee.How much did her lottery tickets end up costing her?

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Question 20

What makes a home equity loan different from other loans?

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Quiz 5: Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Define two of the following: a.Grace period. b.Line of credit. c.Interest.