PFL -- Credit -- Chapter 7

Question 1

achieving financial responsibility means that life will always be easy and happy

Answer 1

false

Question 2

buying luxury items while basic needs are not being met is an example of financial irresponsibility

Answer 2

true

Question 3

the first step in creating a buying plan is defending your spending goal

Answer 3

true

Question 4

an extended warranty covers the repair costs beyond the original warranty period

Answer 4

true

Question 5

each purchase involves 2 choices: what to buy and how to pay for it

Answer 5

true

Question 6

consumer loans usually have variable interest rates because they are unsecured loans

Answer 6

false

Question 7

a lender may require a borrower to provide collateral for a loan

Answer 7

true

Question 8

with a line of credit there is no maximum amount that can be borrowed

Answer 8

false

Question 9

many merchants encourage their customers to use store credit card accounts

Answer 9

true

Question 10

without credit many people would have to wait to buy things that could save them time and money

Answer 10

true

Question 11

when you report a dispute on your credit card statement, the credit card company must resolve the dispute within a certain time period

Answer 11

true

Question 12

if you pay the full amount owed on your credit card each month, you can avoid paying interest charges on an outstanding balance

Answer 12

true

Question 13

a fee that is charged for violating a credit card agreement is called a rebate

Answer 13

false

Question 14

low introductory rates on credit cards often last 6 months to a year

Answer 14

true

Question 15

credit card issuers can lower your credit limit any time

Answer 15

true

Question 16

if you are charged an over-the-limit fee by your credit card company, yout credit score will not be affected

Answer 16

false

Question 17

easy access credit is usually a good deal for consumers, they should respond promptly to avoid hidden costs

Answer 17

false

Question 18

using credit provides increased spending power

Answer 18

true

Question 19

when you are financially responsible, you are able to meet your own needs by carefully managing your resources

Answer 19

true

Question 20

which of the following is a symptom of financial irresponsibility

Answer 20

all of the above

Question 21

when you receive your credit card statement you should

Answer 21

all of the above

Question 22

which of the following is the final step in creating a buying plan

Answer 22

set a spending limit

Question 23

a good buying plan begins with

Answer 23

evaluating your wants and needs

Question 24

standards or rules by which something can be judged are called

Answer 24

criteria

Question 25

the person or company who extends credit to a borrower is called the

Answer 25

creditor

Question 26

the ability to receive services such as care by a utility, and pay for them later is called

Answer 26

service credit

Question 27

credit for a set amount that is to be paid off in a set period of time is called

Answer 27

installment credit

Question 28

which of the following types of credit requires that you pay the balance in full each month

Answer 28

charge card

Question 29

on a credit card with a variable rate of interest

Answer 29

all of the above

Question 30

when you dispute an item on your credit card statement

Answer 30

you can withhold payment of the disputed amount

Question 31

if you try to charge more than your limit on your card

Answer 31

both a and b

Question 32

which of the following actions by a credit card company is illegal

Answer 32

raising rates on existing balances

Question 33

which of the following is an example of easy access credit

Answer 33

instant credit offer

Question 34

which of the following online activities should be avoided

Answer 34

online pop-up ads offering credit

Question 35

which of the following types of credit usually has a fixed rate of interest for a set period of time

Answer 35

consumer loan

Question 36

transunion, equifax, and experian are all examples of

Answer 36

credit bureaus

Question 37

if you are denied credit, how long after the denial do you have to request a free credit report

Answer 37

one month (30 days)