Question 1

The Fair Credit Billing Act sets the procedures for promptly correcting billing errors.

Accepted Answer

A) True 
 B)False

Question 2

In determining your credit capacity,you first provide for basic necessities,such as:

Accepted Answer

A)  furniture.
B)  home furnishings.
C)  mortgage or rent.
D)  automobile.
E)  durable goods.F) C) and D)
G) B) and E)

Question 3

Installment sales credit is a loan that allows you to receive high-priced items,such as large appliances or furniture.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

The answer of What are the two basic types of...

Question 5

Department stores and gasoline companies are good places to obtain your first credit card.

Accepted Answer

A) True 
 B)False

Question 6

A good example of closed-end credit is:

Accepted Answer

A)  a credit card issued by a department store.
B)  a credit card issued by VISA or MasterCard.
C)  the use of overdraft protection at a bank.
D)  the use of a cashier's check to pay for a purchase.
E)  a mortgage loan.F) B) and D)
G) A) and E)

Question 7

Another name for open-end credit is:

Accepted Answer

A)  revolving credit.
B)  a box of credit.
C)  convenience credit.
D)  installment credit.
E)  single lump-sum credit.F) A) and D)
G) D) and E)

Question 8

Which consumer credit law prohibits abusive,deceptive,and unfair practices by debt collectors?

Accepted Answer

A)  Fair Credit Billing Act
B)  Fair Debt Collection Practices Act
C)  Equal Credit Opportunity Act
D)  Fair Credit Reporting Act
E)  Truth in Lending ActF) B) and E)
G) C) and D)

Question 9

Many retailers use open-end credit.

Accepted Answer

A) True 
 B)False

Question 10

Describe the federal law that protects you from billing mistakes.

Accepted Answer

The answer of Describe the federal law that protects you...

Question 11

Which federal consumer credit law regulates the advertising of credit terms?

Accepted Answer

A)  Fair Debt Collection Practices Act
B)  Equal Credit Opportunity Act
C)  Fair Credit Billing Act
D)  Fair Credit Reporting Act
E)  Truth in Lending ActF) B) and E)
G) C) and D)

Question 12

How can you protect yourself against debit/credit card fraud?

Accepted Answer

Protecting yourself against debit and cr...

Question 13

If your monthly net (after-tax) income is $1,500,what should be your maximum amount spent on credit payments?

Accepted Answer

A)  $200
B)  $300
C)  $400
D)  $500
E)  $600F) All of the above
G) A) and C)

Question 14

The accuracy of credit reports has worsened recently.

Accepted Answer

A) True 
 B)False

Question 15

Which federal consumer credit law starts all credit applicants off on the same footing?

Accepted Answer

A)  Fair Credit Reporting Act
B)  Truth in Lending Act
C)  Fair Credit Billing Act
D)  Fair Debt Collection Practices Act
E)  Equal Credit Opportunity ActF) B) and C)
G) B) and E)

Question 16

When you cosign a loan,you are being asked to guarantee this debt.

Accepted Answer

A) True 
 B)False

Question 17

Karen Price is 55 years old,divorced,and has worked at her current job for five years.She is interested in looking at her credit report.Which of the following pieces of information should she find in that report?

Accepted Answer

A)  the address of the house she lived in as a child
B)  a loan for furniture she paid off 12 years ago
C)  the outstanding balance on the Visa card she has today
D)  the names and addresses of her grown children
E)  the fact that she was late paying her electric bill 8 years agoF) A) and E)
G) B) and E)

Question 18

Affan Chawdry has monthly net income of $1,050.He has a house payment of $450 per month,a car loan with payments of $250 per month,a Visa card with payments of $50 per month,and a credit card with a local department store with payments of $100 per month.What is Affan's debt payments-to-income ratio?

Accepted Answer

A)  2.63
B)  1.24
C)  0.81
D)  0.38
E)  0.50F) A) and D)
G) B) and C)

Question 19

In the 5 Cs of credit,capacity refers to the borrower's attitude toward his or her credit obligations.

Accepted Answer

A) True 
 B)False

Question 20

If you have incorrect information in your credit file:

Accepted Answer

A)  you can't really do much about it.
B)  you have no legal remedies.
C)  credit bureaus are not required to change it.
D)  there are legal remedies available to you.
E)  don't worry because it will not affect your ability to borrow money.F) All of the above
G) C) and D)

Exam 6: Introduction to Consumer Credit

The Fair Credit Billing Act sets the procedures for promptly correcting billing errors.

Correct AnswerverifiedShow Answer

How can you protect yourself against debit/credit card fraud?

Correct AnswerAnswered by ExamLex AIProtecting yourself against debit and cr...View AnswerShow Answer

If your monthly net (after-tax) income is $1,500,what should be your maximum amount spent on credit payments?

Correct AnswerverifiedShow Answer

Department stores and gasoline companies are good places to obtain your first credit card.

Correct AnswerverifiedShow Answer

Many retailers use open-end credit.

Correct AnswerverifiedShow Answer

When you cosign a loan,you are being asked to guarantee this debt.

Correct AnswerverifiedShow Answer

If you have incorrect information in your credit file:

Correct AnswerverifiedShow Answer

In the 5 Cs of credit,capacity refers to the borrower's attitude toward his or her credit obligations.

Correct AnswerverifiedShow Answer

Which federal consumer credit law regulates the advertising of credit terms?

Correct AnswerverifiedShow Answer

Karen Price is 55 years old,divorced,and has worked at her current job for five years.She is interested in looking at her credit report.Which of the following pieces of information should she find in that report?

Correct AnswerverifiedShow Answer

Installment sales credit is a loan that allows you to receive high-priced items,such as large appliances or furniture.

Correct AnswerverifiedShow Answer

Which consumer credit law prohibits abusive,deceptive,and unfair practices by debt collectors?

Correct AnswerverifiedShow Answer

In determining your credit capacity,you first provide for basic necessities,such as:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Another name for open-end credit is:

Correct AnswerverifiedShow Answer

Which federal consumer credit law starts all credit applicants off on the same footing?

Correct AnswerverifiedShow Answer

The accuracy of credit reports has worsened recently.

Correct AnswerverifiedShow Answer

A good example of closed-end credit is:

Correct AnswerverifiedShow Answer

Describe the federal law that protects you from billing mistakes.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Protecting yourself against debit and cr...
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