Question 1

A personal line of credit is a pre-arranged loan for a specified amount that you can use by writing a special check.

Accepted Answer

A) True 
 B)False

Question 2

Your friends and neighbors can get credit information about you.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

Consumer loans and revolving credit.Cons...

Question 4

Which of the following is not an example of revolving credit?

Accepted Answer

A)   a line of credit.
B)   a credit card loan.
C)   overdraft protection.
D)   charge cards.
E)   automobile loans.F) A) and C)
G) A) and B)

Question 5

You should sign your new credit cards as soon as they arrive.

Accepted Answer

A) True 
 B)False

Question 6

Consumer credit refers to the use of credit for personal needs (except a home mortgage)by individuals.

Accepted Answer

A) True 
 B)False

Question 7

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 much because you will still get the credit.F) B) and D)
G) A) and B)

Question 8

The borrower's financial ability to meet credit obligations is called

Accepted Answer

A)   capacity.
B)   character.
C)   capital.
D)   collateral.
E)   conditions.F) A) and C)
G) B) and D)

Question 9

The maximum amount of credit you are allowed by a creditor is called a(n)

Accepted Answer

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

Question 10

A personal line of credit is a

Accepted Answer

A)   credit arrangement that has no extra costs.
B)   prearranged loan for a specified amount that you can use by writing a special check.
C)   credit arrangement that has no specific repayment plan.
D)   synonym for installment cash credit.
E)   synonym for single lump-sum credit.F) B) and C)
G) None of the above

Question 11

It is safer to use credit,since charge accounts and credit cards let you shop and travel without carrying large amounts of cash.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is considered to be a consumer loan?

Accepted Answer

A)   Debit card
B)   Credit loan
C)   Personal line of credit
D)   Overdraft protection
E)   Mortgage loanF) C) and D)
G) D) and E)

Question 13

If you think your bill is wrong,you must notify your creditor in writing within 15 days after the bill was mailed.

Accepted Answer

A) True 
 B)False

Question 14

Kathy purchased a $2,000 digital TV from Young's Appliances.She will make 12 equal payments over the next year to pay for it.She is using:

Accepted Answer

A)   an installment loan
B)   open-end credit
C)   revolving check credit
D)   a line of credit
E)   none of the aboveF) D) and E)
G) A) and E)

Question 15

A car loan is an example of a consumer loan.

Accepted Answer

A) True 
 B)False

Question 16

In a closed-end credit,loans are made on a continuous basis and you make at least partial payment.

Accepted Answer

A) True 
 B)False

Question 17

A credit file is a report which includes the individual's present employer and position,former employer(s),public records and a list of cheques returned for insufficient funds.

Accepted Answer

A) True 
 B)False

Question 18

Collateral refers to the borrower's assets or net worth.

Accepted Answer

A) True 
 B)False

Question 19

A home equity loan is usually set up as a revolving line of credit,typically with a variable interest rate.

Accepted Answer

A) True 
 B)False

Question 20

When did installment credit explode on the North American scene?

Accepted Answer

A)   Just after World War II
B)   with the advent of television in the late 1940s
C)   with the advent of the automobile in the early 1900s
D)   during the recession of the 1950s
E)   during the inflation of the 1970sF) B) and D)
G) None of the above

Exam 5: Consumer Credit: Advantages, Disadvantages, Sources, and Costs

A car loan is an example of a consumer loan.

Correct AnswerverifiedShow Answer

Kathy purchased a $2,000 digital TV from Young's Appliances.She will make 12 equal payments over the next year to pay for it.She is using:

Correct AnswerverifiedShow Answer

Your friends and neighbors can get credit information about you.

Correct AnswerverifiedShow Answer

It is safer to use credit,since charge accounts and credit cards let you shop and travel without carrying large amounts of cash.

Correct AnswerverifiedShow Answer

If you have incorrect information in your credit file,

Correct AnswerverifiedShow Answer

A personal line of credit is a pre-arranged loan for a specified amount that you can use by writing a special check.

Correct AnswerverifiedShow Answer

The maximum amount of credit you are allowed by a creditor is called a(n)

Correct AnswerverifiedShow Answer

You should sign your new credit cards as soon as they arrive.

Correct AnswerverifiedShow Answer

When did installment credit explode on the North American scene?

Correct AnswerverifiedShow Answer

Which of the following is not an example of revolving credit?

Correct AnswerverifiedShow Answer

A personal line of credit is a

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Which of the following is considered to be a consumer loan?

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

Correct AnswerverifiedConsumer loans and revolving credit.Cons...View AnswerShow Answer

A home equity loan is usually set up as a revolving line of credit,typically with a variable interest rate.

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In a closed-end credit,loans are made on a continuous basis and you make at least partial payment.

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The borrower's financial ability to meet credit obligations is called

Correct AnswerverifiedShow Answer

Collateral refers to the borrower's assets or net worth.

Correct AnswerverifiedShow Answer

If you think your bill is wrong,you must notify your creditor in writing within 15 days after the bill was mailed.

Correct AnswerverifiedShow Answer

Consumer credit refers to the use of credit for personal needs (except a home mortgage)by individuals.

Correct AnswerverifiedShow Answer

A credit file is a report which includes the individual's present employer and position,former employer(s),public records and a list of cheques returned for insufficient funds.

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Consumer loans and revolving credit.Cons...
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