bank savings and loan qba 4 review - answer key credit...

QBA 4 Review - Answer Key

1.

9

Bank Savings and Loan Credit Union X All of the above

Which of the following is considered a financial institution?

2.

9

Credit Union FDIC-Insured Savings and Loan X Chartered

A Bank is called this when it completes the official process of receiving approval from astate or federal regulatory agency to operate in a given area underspecified conditions.

3.

9

True X False

A bank may only be chartered by the state where its official headquarters is located.

4.

9

X True False

Today, many of the same services are offered by banks, savings and loans and credit unions.

5.

9

X True False

Bank branches are strategically located to make it easy for you to use the services the bank offers.

6.

9

Asynchronous Transfer Manager X Automated Teller Machine Advanced Transfer Machine Account Technical Manager

In the banking world, what does ATM stand for?

7.

9

True X False

Neither a deposit transaction nor a withdrawal transaction are financial transactions.

8.

X True False

You are making a deposit transaction when you put money into a bank.

QBA 4 Review - - Printed: 6/9/2016 of 38Copyright (c) 2010 - 2016 REMTECH, inc. All Rights Reserved.

99.

9

X True False

You are making a withdrawal transaction when you take money out of a bank.

10.

9

Banking Fees Tellers X The Concept of Interest Withdrawals

_______________ make(s) it possible for you and the bank to earn money when you deposit your money in the bank.

11.

9

Charge customers to park and to speak to the tellers Most banks do not make any money X Charge customers more interest on loans than they pay on deposits All of the above

Which of the following best describes how banks make money?

12.

9

True X False

Banks are not legally required to maintain a minimum reserve of cash to cover the withdrawal transactions that occur during the normal course of business.

13.

9

X True False

Most banks provide access to your money even when the bank is not open.

14.

9

True X False

Banks are not a safe place to keep your money because of the high number of bank robberies.

15.

9

X True False

Banks provide a safe place to keep your money, allow you to put your money to work and provide many of the financial services you will need during your life.

16.

9

Credit Score Credit Card Line of Credit X Credit History

This is a formal and extensive record of how good an individual is at maintaining their credit and paying their current and past debts in a timely manner.


17.

9

True X False

If your money is in a bank and it is robbed, you simply lose all of your money and have to start saving all over again.

18.

9

X True False

The FDIC is responsible for handling bank failures.

19.

9

X True False

The FDIC regularly examines banks and savings institutions to make sure each is following the established laws and regulations.

20.

9

X True False

The fees paid by the FDIC member banks fund the operation of the FDIC.

21.

9

X True False

The banking industry is considered to be the most regulated and supervised business in the United States.

22.

9

X True False

You are fully protected if you have less than $250,000 in deposit accounts in a FDIC-insured bank.

23.

9

X True False

You can be insured for more than $250,000 depending on how your accounts are structured.

24.

9

X True False

Banks are like any other business because they have assets and liabilities.

25.

9

True X False

A bank can fail when the bank's assets exceed their liabilities.

26.

True X False

A bank has not failed in the U.S. since 1934.


927.

9

True X False

The FDIC monitors banks only when their assets are greater than their liabilities and the bank is struggling.

28.

9

Close the bank and sell off all assets to pay the depositors Arrange for another bank to purchase it and assume its liabilities Replace the board of directors and the bank's managers X All of the above

Which of the following items can the FDIC do when a bank fails?

29.

9

True X False

Bank failures only happen when economic conditions in the United States are really bad.

30.

9

Fraud X Internal Controls Economic Conditions Liabilities Quality Assurance

This is the general term for procedures and actions by a bank to make sure the day-to-day operation of the bank is in accordance with the law and all government regulations.

31.

9

X Fraud Internal Controls Economic Conditions Liabilities Mismanagement

This is the term for the distortion of financial records, over-payment for assets or services, concealment of information or any other activity designed to steal money from an individual or business.

32.

9

True X False

Economic conditions are frequently the major cause of bank failures.

33.

1

True X False

The vast majority of banks only offer deposit services to their customers.


34.

1

True X False

A time deposit is considered a deposit account, but a checking and savings account are not.

35.

1

Checking Account Savings Account X Time Deposit Mutual Fund

This is a deposit account established at a bank where the money deposited will earn interest but can not be withdrawn, without penalty, for a specified period of time.

36.

1

X True False

If you borrow money from a bank where you have money deposited, you will still be charged interest on a loan.

37.

1

X True False

Most banks make consumer, business and mortgage loans to their customers.

38.

1

Resume Cover letter X Check Credit history

This is a standard printed form with a date, amount, pay to whom and signature instructing a bank to pay money to another individual or business.

39.

1

True X False

Most businesses won't accept checks as payment for goods and services.

40.

1

True X False

Most banks charge a fee for having a checking account.

41.

1

X True False

Most basic checking accounts do not pay interest on the balance of your account.


42.

1

No Opportunity Wasted X Negotiable Order of Withdrawal National Overdraft Waiver National Organization for Withdrawals

In banking, what does the acronym 'NOW' stand for?

43.

1

True X False

A checking account that periodically pays the account holder interest on the balance of the account if the balance remains above a required minimum level is known as a time deposit.

44.

1

Check Credit Check Reality Check X Check Register Statement

This refers to a tabulated form that allows an individual to record when a check was written, the amount and to whom the money was paid as well as keep an accurate running total of the account balance.

45.

1

True X False

Savings accounts do not typically pay interest on the balance of the account.

46.

1

True X False

The interest rate paid on savings accounts is generally less than the rate paid on checking accounts.

47.

1

True X False

Most savings account allow unlimited check writing and rarely require a minimum account balance.

48.

1

X Time Deposit Checking Account Savings Account Mutual Fund

This is an investment account opened for a specified length of time in which you can only withdraw funds without penalty after the specified amount of time has elapsed.


49.

1

X promise not to withdraw any money for the length of the investment are limited to a maximum number of withdrawal transactions each month invest a higher minimum amount than you would in a savings or checking account save the bank money by only accessing the account electronically

Time deposits pay more interest than deposit accounts because you ____________________.

50.

1

True X False

A CD is a time deposit, but a GIC is not.

51.

1

several hours to several days several days to an entire month X several months to several years two years to an unlimited time

The length of time the money in a Certificate of Deposit (CD) is inaccessible can range from ___________________.

52.

1

True X False

Banks are not allowed to offer retirement accounts to their customers.

53.

1

X True False

An IRA and Roth IRA are both retirement accounts offered by many banks.

54.

1

X True False

A Roth IRA is an individual retirement account in which contributions are never tax-deferred.

55.

1

True X False

An IRA is an individual retirement account in which contributions are never tax-deferred.

56.

1

Business Loan Consumer Loan X Mortgage Loan Collateral Loan

This is a type of loan made to individuals and businesses to purchase real estate or land.


57.

1

True X False

Most banks offer consumer loans to their customers, but not business or mortgage loans.

58.

1

True X False

A business loan is made to an individual who owns a business, rather than directly to the legal business entity.

59.

1

X True False

A consumer loan is made to an individual so they can buy goods and services.

60.

1

Security Insurance Accessory X Collateral

This is the term for something of value that is pledged by the borrower to the lender to secure a loan.

61.

1

X True False

A consumer loan is typically paid back in equal monthly installments or payments over the life of the loan.

62.

1

X True False

A mortgage loan is made to individuals and businesses to purchase real estate or land.

63.

1

X True False

You should treat the process of selecting a bank as a two-step process.

64.

1

True X False

It is nice, but not really important for the bank you select to be FDIC-insured.

65.

1

X True False

The bank you select should not be in financial trouble.


66.

1

True X False

The bank you select should offer at least 50% of the services you need.

67.

1

Pays the highest interest rate on deposits Charges the lowest interest rate on loans Has a branch close to your work or home X Serves hot coffee and doughnuts each day

Which of the following is not important when comparing banks?

68.

1

True X False

A bank's hours of operation and whether it has minimal or no service fees are nice extras, but not actually important features for you to consider when selecting a bank.

69.

1

True X False

A budget is a summary of your investments over a given period of time.

70.

1

True X False

A Spending Plan is a formal plan documenting how an individual's income will be invested for retirement.

71.

1

Golden Key to Stop Gap of Starting Point of X Logical Cap to Mimimum Level for

To create savings, your income must be considered as the ________________ your spending.

72.

1

True X False

Savings can only be used to pay for expected expenses.

73.

1

X True False

You can track every dollar you spend and still not be a financially responsible individual.

74.

1

True X False

Because of advances in banking technology, it is much harder today to spend more money than you have than it has ever been in the past.

75.

1

Positive budget categories X Primary budget categories Secondary budget categories Third-party budget categories

Which budget category includes housing, utilities, food, transportation and health care?

76.

1

True X False

Money spent in the secondary budget categories affects your health and welfare.

77.

1

True X False

The optimal budget should have all primary budget categories and no secondary budget categories.

78.

1

X True False

Income is money received from working and investments.

79.

1

Money Market Accounts Real Estate Stocks Bonds X All of the above

Investments are financial instruments such as:

80.

1

True X False

Take home pay is the money you have left after you have paid all of your expenses.

81.

1

True X False

Gross Pay is the total amount of money paid to an employee by an employer after taxes and other deductions are subtracted.


82.

1

Investments Bills X Expenditures Take Home Pay Deductions

The large and small sums of money individuals spend in the different budget categories each pay period are called:

83.

1

True X False

A short-term budget is typically created for 5 years into the future.

84.

1

X True False

A long-term budget is typically created for 5 or more years.

85.

1

X True False

A budget is dynamic and should be adjusted when your personal situation changes.

86.

1

X True False

You should never go longer than one year without updating your budget.

87.

1

X True False

Creating a budget provides benefits whether or not you use it regularly.

88.

1

True X False

If you are realistic and fully embrace the concept of living within a budget, spending less than your take home pay amount is impossible.

89.

1

X True False

A budget helps to create potential savings and track income and expense.

90.

1

True X False

A budget allows your money to control you instead of you controlling your money.


91.

1

A student working part-time A parent A full-time worker A retired person X All of the above

Which of the following persons should use a budget?

92.

1

X True False

A budget is an essential financial tool for all individuals because it will help them reach their financial goals in life.

93.

1

X True False

It is never too late to begin using a budget.

94.

1

High school students College students Adults Retirees X All of the above

Which of the following individuals would benefit from creating and using a budget?

95.

1

weaknesses wants X needs wishes

The Primary Budget categories correlate to an individual's ______________.

96.

1

True X False

The Secondary Budget categories correlate to an individual's needs.

97.

1

True X False

Items in your "Needs" budget categories include the goods and services you pay for that are not essential to your health and welfare.

98.

X True False

Items in your "Wants" budget categories include the goods and services an individual pays for that are not essential to their health and welfare, but can affect the quality of their life.


199.

1

True X False

Paying to attend a sporting event, going to a movie and eating out can be classified as items in the "needs" budget categories.

100.

1

True X False

Paying your monthly rent, electricity bill and water bill can be classified as items in your "wants" budget categories.

101.

1

X True False

The average individual has only one or two sources of income.

102.

1

The time period their wage is based on ($/hour, $/year) The fiscal year their pay and deductions are based on X The length of time between paydays The time between when their paycheck is dated and when it is deposited in thebank

An employee's Pay Period is:

103.

1

calculator bank statement X budget computer

Without a __________, most people would not know where all their money is spent.

104.

1

True X False

Creating a budget is 5% psychological and 95% manual labor.

105.

1

X True False

A budget is simply a tool that helps individuals understand when, where and why they are spending their money.

106.

1

the holidays calculating your gross income dividends X tax deductions

First step to creating and using a budget is determining the amount of income you'll receive after _______________.


107.

1

X True False

Income includes all the money you earn at work, tips, baby-sitting, gifts and investments.

108.

1

True X False

Determining how much money you have coming in will also identify the minimum amount you can spend.

109.

1

X True False

Always consider your income after tax deductions as the logical cap to your spending.

110.

1

X never always sometimes conveniently

You should make a concerted effort to ____________ spend more money than you take home.

111.

1

more money than your take home pay the same amount of money you bring home X less money than you bring home all of the money in your gross income

Potential savings are only created when you spend ____________ each pay period .

112.

1

X True False

You should consider saving a portion of your income each pay period.

113.

1

100% X 90% - 98% 50% - 75% 25% - 50% 0%

What percentage of your income do many experts recommend you should consider as the maximum amount you should spend each pay period?


114.

1

overpayments bank fees X similar expenses investments

Budget categories are divisions or collection groups individuals create within their budget to collect and analyze _______________.

115.

1

True X False

The primary budget categories are also known as your wants.

116.

1

Housing Utilities Food Transportation X Leisure

____________ is generally not considered a primary budget category.

117.

1

True X False

The secondary budget categories are also known as your needs.

118.

1

Clothing Leisure Education Miscellaneous X None of the above

____________ is generally not considered a secondary budget category.

119.

1

True X False

Your budget categories should reflect how your friends spend their money.

120.

1

True X False

Those expenses that do not fit into one of the budget categories should simply not be recorded.

121.

1

X more accurate less accurate more difficult less difficult

The ___________________ your budget, the better you will be able to manage your money.

122.

1

X True False

Small purchases over time can become a significant expense.

123.

1

X True False

Primary budget categories are essential to your health and welfare.

124.

1

Housing Utilities Food Transportation X All of the above

Primary budget categories typically include _______________.

125.

1

True X False

It is simple to reduce money spent in the primary budget categories because these categories only affect your health and welfare.

126.

1

True X False

Eliminating some of the primary budget categories is usually quite easy.

127.

1

X True False

Reducing your expenses in some of the primary budget categories is possible.

128.

1

X True False

Eating at home rather than dining out helps to reduce the amount of money spent in the primary budget categories.


129.

1

health and welfare X quality of life potential savings All of the above

Secondary budget categories affect your ____________.

130.

1

Clothing Leisure Education Miscellaneous X All of the above

Secondary budget categories include _______________.

131.

1

X True False

Reducing the amount of money spent in the secondary rather than primary budget categories is easier because they do not affect your health and welfare.

132.

1

X Simply rent a movie rather than go out to the movie theater Keep an older vehicle rather than purchase a new one Move to a cheaper apartment Eat at home rather than dine out All of the above

Which of the following helps to reduce money spent in the secondary budget categories?

133.

1

Clothing Leisure X Education Miscellaneous None of the above

Which of the secondary budget categories is the most important to your financial situation?

134.

1

True X False

Money spent in the primary budget categories is sometimes called discretionary spending.

135.

1

True X False

Spending more money than you take home each pay period is one of the major goals of having a budget.


136.

1

X True False

Potential savings can be saved or invested for future use.

137.

1

Receipts Kept from Shopping Trips Credit Card Statements Check Register Entries X All of the above

Which of the following should individuals use to help determine where they have been spending their money and how much is being spent in each budget category?

138.

1

Less than 15% Around 35% X More than 70% Roughly 90%

Approximately how much of an average American's take home pay is spent in the primary budget categories?

139.

1

$ 1,050 $ 650 $ 500 X $ 450 $ 300

If your monthly take home pay is $1,500 and you spend 30% of it on rent, what is your monthly rent payment?

140.

1

X True False

You should attempt to save 2% or more of your take home pay each pay period.

141.

1

True X False

The small, miscellaneous items you purchase each day are not considered as expenses.

142.

1

True X False

Many, but not all expenses you have can be classified as 'needs' or 'wants'.


143.

1

wants X needs basic expenses All of the above

The basic necessities of life are considered ____________.

144.

1

True X False

Expenses affecting your health and welfare are considered 'wants'.

145.

1

Housing Utilities Food Health Care X None of the above

Spending on which of the following categories is not considered a basic necessity of life?

146.

1

True X False

Expenses affecting the quality of your life are considered 'needs'.

147.

1

Transportation X Education Housing Food All of the above

Making a purchase in which of the following category is considered a 'want'?

148.

1

True X False

You are creating savings if you spend more money than you make.

149.

1

True X False

Most individuals completely understand how fast debt accumulates.

150.

1

the elderly only those 50 or older retired people X young adults

Establishing credit is very important for _______________.

151.

1

True X False

Renting an apartment, buying a car and getting a job are things that aren't affected by having bad credit.

152.

1

X True False

Before 1980, credit was not generally extended to those who did not have the ability to repay debt.

153.

1

Federal Education Department First Education Department X Federal Reserve System Fiscal Exchange Department

What does 'FED' stand for?

154.

1

X True False

Obtaining credit today is not as regulated as it was prior to 1980.

155.

1

basic X long-term short-term lifestyle positive

You should consider the _______________ effects on your life when making any financial decision.

156.

1

clothing trends technology X spending cars All of the above

Typically, young people acquire their knowledge of _______________ from their parents, friends and by trial and error.


157.

1

True X False

Young people are very resilient and rarely give in to peer pressure or the urge of instant gratification.

158.

1

Friend Rapport X Peer Pressure Steady Relationship Job Anxiety Ethnic Tolerance

Stress and/or anxiety placed on an individual by their friends to act or respond in a manner generally accepted by their friends is usually called this.

159.

1

Getting Married Having Children Retirement X Buying Clothing Graduation

Which of the following is not considered a life event?

160.

1

Basic Life Services Business Legal Services X Bureau of Labor Statistics Banking Legal Society

What does the acronym 'BLS' stand for?

161.

1

Adults 25 -34 Adults 35 - 44 Adults 55 - 74 X Adults 65 -74

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Based on the Consumer Expenditure Survey (CES), which adult age group spends more on health care?

162.

1

True X False

The True cost of spending will always be less than the price of the item you purchase.

163.

1

X True False

Opportunity cost is the cost of making a spending decision compared to the cost of the other financial alternatives.

164.

1

how you will pay the opportunity cost of spending the risk to your credit X All of the above

The True cost of spending depends on ___________________.

165.

1

$ 17 $ 131 X $ 169 $ 669

To the nearest dollar, what would be the opportunity cost associated with spending $500 now rather than purchasing a 5-year CD paying 6% per year ?

166.

1

simple straightforward mind-numbing X difficult

The future is _____________ to predict.

167.

1

X True False

You should be cautious about making spending decisions based on what you believe may happen in the future.

168.

1

X True False

Most people believe it is easier to use credit than pay cash for goods and services.

169.

1

X True False

You should always relate the cost of an item to the number of hours you have to work to pay for it.

170.

1

bad, worse debit, credit card housing, health care X installment, revolving

Debt can be classified as ____________ or ____________ debt.

171.

1

True X False

You will be required to make a minimum monthly payment to repay installment debt.


172.

1

True X False

Installment debt is money owed via a short-term loan agreement.

173.

1

open-end debt X closed-end debt incremental debt equal debt credit card debt

Installment debt is also called _______________.

174.

1

Home Mortgage Car Loan X Credit Card Savings Account

A _______________ is an example of revolving debt.

175.

1

X True False

You will be required to make a minimum monthly payment to repay revolving debt.

176.

1

X True False

Revolving debt is also called open-end debt.

177.

1

Liquidation X Bankruptcy Insolvency Estate sale

This is the name for a proceeding in which an individual or business, unable to meet their financial obligations, petitions the court for protection from their collectors.

178.

1

True X False

The number of individuals declaring bankruptcy has decreased to less than 10,000 per year since 2000.


179.

1

Low interest rates Internet shopping Easy access to credit College tuition and fees X None of the above

Which of the following do financial experts say is not a reason the typical consumer has more debt today than in the past?

180.

1

True X False

All debt is bad.

181.

1

X True False

Good debt is debt acquired when purchased assets increase in value while owned or provide distinct advantages while the debt is being repaid.

182.

1

X True False

Purchasing items on credit that increase in value while you are paying for them is considered good debt.

183.

1

True X False

Purchasing wasting assets on credit is considered extremely good debt.

184.

1

Purchasing new clothes An island vacation A fancy meal at a restaurant X All of the above None of the above

Which of the following is an example of bad debt?

185.

1

True X False

You have too much debt if your credit card limit is higher than your monthly take home pay.

186.

1

X True False

It is possible to get out of debt.

187.

1

Avoiding Wasting Assets Keeping up with the Joneses X Living Within Your Means Maximizing Your Net Worth Accumulating Good Debt

What is the common term for the act or process of never spending more money than you currently have?

188.

1

salary, bonuses budget, assets good debt, bad debt X lifestyle, spending habits

Getting out of debt requires you to adjust your ____________ and ____________ to match your income.

189.

1

True X False

It is better to pay interest on debt than to earn interest on an investment.

190.

1

investments, bad X needs, wants long-term goals, short-term goals goals, impossible None of the above

People typically find that many of their ____________ are really ____________ and can be reduced or eliminated.

191.

1

True X False

Declaring bankruptcy will only affect your ability to get a loan, credit or credit card for a few months.

192.

1

X True False

When you declare bankruptcy, the Federal Bankruptcy Court will develop a plan allowing you to eliminate all or some of your debt under the guidance of the court.

193.

1

X True False

Not all debts can be absolved by declaring bankruptcy.


194.

1

Excepted property Excused property X Exempt property Excuse property None of the above

Property that has been identified as essential to starting over and cannot be seized by the Federal Bankruptcy Court.

195.

1

Chapter 5, Chapter 15 X Chapter 7, Chapter 13 Chapter 7, Chapter 33 Chapter 13, Chapter 17 None of the above

Today, the two most predominate types of personal bankruptcy are ____________ and ____________.

196.

1

X Chapter 86 Chapter 13 Chapter 11 Chapter 7 None of the above

Which of the following is not a type of personal bankruptcy?

197.

1

reorganization Chapter 13 insolvency X liquidation None of the above

Chapter 7 bankruptcy is also call ____________ bankruptcy.

198.

1

X reorganization insolvency liquidation None of the above

Chapter 13 bankruptcy is also called ____________________ bankruptcy.

199.

1

True X False

You can think of credit as an unlimited amount money available to you that must be paid back.

200.

1

True X False

The amount of credit you use is added to the total amount of credit available to you.

201.

1

X True False

Your debt increases by the amount of money you use on credit, plus the interest you must pay.

202.

1

X True False

There are both advantages and disadvantages to using credit.

203.

2

cash X credit their parents banks None of the above

Most people would never be able to purchase a vehicle or buy a home without ____________.

204.

2

X True False

Businesses reserve their best credit terms and rates for those who use credit responsibly.

205.

2

X True False

An increase in the interest rate increases the burden of making payments for borrowers.

206.

2

True X False

Easy access to credit makes it easier for all individuals to make wise spending decisions.

207.

2

X Consumer protection laws Highway and Traffic laws Safety and Health laws Property Tax laws

____________________ are passed by Congress to ensure everyone is treated equally in our society.


208.

2

all individuals receive the same amount of credit all lenders disclose the True APR for all financial transactions X all individuals have equal access to credit all banks must provide credit to all those that apply None of the above

The Equal Credit Opportunity Act (ECOA) was passed to ensure _____________________.

209.

2

X True False

Your credit history is considered sensitive information that must be safeguarded by those maintaining it.

210.

2

X True False

Credit makes retail items available to individuals who do not have enough cash to purchase them.

211.

2

X True False

When you buy an item on credit, you are paying more than the sticker price for the item.

212.

2

True X False

A credit bureau is a company that collects information relevant to your employment history to see if your current paycheck covers your debt.

213.

2

True X False

A credit bureau is also called a debt collection agency.

214.

2

2 X 3 5 7 more than 10

There are _____ major credit bureaus in the United States.

215.

2

True X False

Equity, TransAtlantic, and Experius are the three major credit bureaus in the U.S.


216.

2

consumers individuals the government X businesses None of the above

A credit bureau does not make credit decisions for _______________.

217.

2

Bureau Report Home Report X Credit Report Debit Report None of the above

This is the term for a formal report of an individual's credit history prepared by one of the major credit bureaus. The report contains an individual's complete payment history and status of all credit accounts.

218.

2

0 X 1 3 6 12

Each year you are entitled to _____ free credit report(s) from each of the major credit bureaus.

219.

2

True X False

You should request a credit report at least every 10 years to ensure the information in the report is correct.

220.

2

Identifying Section Credit Information Section Public Record Section Inquiry Section X All of the above

Which of the following is a section within a credit report?

221.

2

True X False

A credit score is a single number from 0 to 100.

222.

2

True X False

More than 75% of individuals have a credit score higher than 800.


223.

2

True X False

A credit score indicates how long you have been using credit.

224.

2

X True False

Credit scores help businesses assess credit risk more fairly for all individuals.

225.

2

True X False

A credit score is also called a FED score.

226.

2

X True False

It is important to establish credit before you actually need it.

227.

2

X True False

Opening a checking account or savings account with a local bank is a way to begin establishing credit.

228.

2

True X False

It is up to the credit bureaus to ensure you use your credit responsibly.

229.

2

Never "max out" a credit card Always pay bills on time Never purchase more on credit than you can repay Only have 1 or 2 credit cards X All of the above

Which of the following is a way to show businesses you understand credit and will use it responsibly?

230.

2

X True False

Most experts agree it is much easier to use credit responsibly than to overcome credit problems.

231.

2

X True False

Once your credit is damaged, you must pay off your debt and then begin to actively monitor your credit history.


232.

2

1850's X 1920's 1940's 1960's 1980's

Credit cards were first used in the U.S. during the _______.

233.

2

X True False

A credit card represents a line of credit available to the cardholder.

234.

2

True X False

The company issuing the credit card will deposit money into your bank account each time you use their card.

235.

2

X True False

A Credit Limit refers to the maximum amount of credit available to an individual, as established with their bank or financial institution.

236.

2

True X False

Fortunately for all, it is more difficult to misuse a credit card than it is to use one responsibly.

237.

2

True X False

There are no advantages or disadvantages to using a credit card.

238.

2

the interest rate your grace period for payment the interest calculation method X your required credit score to keep the card All of the above

A credit card's terms and conditions do not specify _______________.

239.

2

Bank, Travel/Entertainment, and Designer Cards Travel/Entertainment, House, and National Cards X House, Bank, and Travel/Entertainment Cards Bank, Debit, and House Cards Debit, Bank, and Travel/ Entertainment Cards

Which of the following type(s) are major types of credit card classifications?

240.

2

X True False

Bank credit cards are issued by banks to their customers.

241.

2

True X False

Bank credit cards are not accepted by most retail stores to make purchases.

242.

2

Typical, Debt and Secured Standard, Debt and Protected X Standard, Debit and Secured Standard, Charge and Safe

Which of the following best describes the three types of bank credit cards?

243.

2

X True False

A standard credit card comes with a fixed line of credit and a fixed or variable APR.

244.

2

True X False

Using a debit card to make purchases automatically deposits money into your checking account.

245.

2

True X False

Debit cards are sometimes called delayed payment cards.

246.

2

True X False

A secured credit card allows individuals with bad credit to use a credit card at secure businesses and banks.


247.

2

True X False

A secured credit card can be used to make a purchase even if the holder of the card exceeds the amount of money available in the bank account.

248.

2

X True False

Travel/Entertainment cards work exactly like bank credit cards except the total balance must be paid when you receive your monthly statement.

249.

2

True X False

Travel/Entertainment cards are used almost exclusively by people who are retired or have no regular job.

250.

2

True X False

House credit cards are issued by banks.

251.

2

X True False

House credit cards can only be used in the store of the retail business issuing the card.

252.

2

daily weekly X monthly annual

Most credit card companies will send you a ____________ billing statement.

253.

2

20% 35% X 50% 85% None of the above

Statistics show that only ____________ of all credit cardholders pay their accounts in full each month.

254.

2

True X False

A Credit Period is the length of time, after the payment due date, an individual has to pay a credit card balance in full and avoid having to pay interest on the balance.


255.

2

X True False

The minimum monthly payment is the least amount you can pay on credit card debt each billing period.

256.

2

X Asset Credit Fees Debt Collateral

The term for anything with monetary value owned by an individual or business or is owed to that individual or business.

257.

2

True X False

The interest rate for credit cards is significantly lower than the interest rate for regular bank loans.

258.

2

X True False

Credit card debt is not secured by any of your assets.

259.

2

Fixed rate Variable rate Period interest rate X APR None of the above

The ____________ is the annual interest rate charged when you do not pay your total balance each billing period.

260.

2

True X False

To maximize your savings, you should never pay more than the minimum monthly payment amount on credit card debt.

261.

2

True X False

If you pay interest charges on a credit card, there are no other fees you can be charged.

262.

2

X True False

Each credit card is different and can have different fees associated with it.


263.

2

Annual Fee Late Charge Fee Over-Limit Fee Cash Advance Fee X All of the above

Which of the following is a common fee associated with credit cards?

264.

2

Previous balance method Adjusted balance method Average daily balance method X All of the above

Which of the following methods is used by credit card companies to calculate the amount interest to be charged when the balance is not paid in full each billing period?

265.

2

X True False

Consumer protection laws are designed to protect consumers from unfair and illegal business practices.

266.

2

X Equal Credit Card Obtainment Act (ECCOA) Fair Credit Reporting Act (FCRA) Truth in Lending Act (TILA) Credit Repair Organization Act (CROA)

Which of the following is not an important consumer protection law?

267.

2

True X False

The Fair Credit Billing Act (FCBA) requires creditors to be fair and polite on the phone, and only call between 9:00 AM and 6:00 PM when they call to collect their money owed.

268.

2

True X False

Few people have ruined their credit either through lack of knowledge or irresponsible use of credit cards. Mostly it is due to factors beyond their control.

269.

2

X True False

Many parents have expressed concern about credit card companies aggressively marketing credit cards to college students.

270.

2

X True False

Each person is unique and has personal information that only applies to them.

271.

2

Social security number Bank account number Credit card number Driver's license number X All of the above

Which of the following is considered personal information and can be stolen by another individual?

272.

2

True X False

Thanks to computerized databases, it costs little and takes only a few hours to restore your credit when your identity happens to be stolen.

273.

2

True X False

The Fair Credit Reporting Act does not limit the amount of money you are liable for if your identity is stolen.

274.

2

True X False

Most experts agree it is harder to guard your personal information than it is to repair your credit after a thief has abused it.

275.

2

All Most X Some Very Few

____________ thieves hack into computers to gain access to personal information.

276.

2

True X False

Identity thieves never steal mail from your mailbox because it is a federal crime and other methods are much less risky.

277.

2

True X False

You should keep all of your personal information in your purse or wallet because you might need it in an emergency.

278.

2

X True False

You should never give out your personal information over the phone unless you know and trust the caller.


279.

2

True X False

Spoofing or cloned websites are not a problem for either the government or major corporations.

280.

2

Trash Hijacking Garbage Gala Junk Journey X Dumpster Diving Sewer Surfing

This is the common term for the process of going through an individual's trash to collect discarded documents containing the owner's personal information.

281.

2

True X False

If you have anti-virus software, identity thieves are incapable of using fake emails to make you think they are from a company you routinely do business with.

282.

2

X True False

You should be aware of shoulder surfers attempting to invade your space when conducting business transactions.

283.

2

True X False

Money is the key to preventing and recovering from identity theft.

284.

2

X True False

You should always guard your Social Security number because it is the key to the rest of your personal information.

285.

2

X True False

An individual must monitor their credit history and always be looking for credit activity that's not theirs to help prevent identity theft.

286.

2

Guarding your Social Security number Monitor your credit history Monitor your credit card bills Shred all bills and business papers containing personal information X All of the above

Which of the following is a way to prevent someone from gaining access to your personal information?


287.

2

X True False

Mailing all correspondence from secure locations is a way to prevent someone from stealing your personal information.

288.

2

True X False

Time is not an important factor when your identity is stolen, since you are protected by law from being liable for more than a minimum amount.

289.

2

X True False

If your identity is stolen, you need to contact the three major credit bureaus and have them place a fraud alert on your credit history.

290.

2

X True False

If you're a victim of identity theft, make sure to keep alert for additional fraudulent activity in your name.


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