Personal Finance Chapter 8 Review

By evaluating your credit options, you can _____.

• reduce your finance charges

• reconsider your decision to borrow money

• discover a less expensive type of loan

• find a lender that charges a lower rate

• All the above

Which of the following offer the least expensive loan?

• finance companies

• banks

• savings and loans associations

• parents or family members

• loan sharks

If you borrow $100 at 12 percent annual interest and repay it in one lump sum at the end of one year, you will have to pay _______.

• $12

• $100

• $112

• $1,200

• $8.33

Which of the following are signs of debt problems?

• foreclosure proceedings

• overdue payments

• approaching credit limits

• foreclosure proceedings and overdue payments

• All of the above

If you have trouble paying your bills, ________________.

• take a personal finance course

• turn to a company that claims to offer assistance in solving debt problems

• check with your local Better Business Bureau for help

• seek assistance from a collection agency

• try to solve the problem with your creditor

Consumer credit counseling services are basically concerned with ____________.

• lending the money to destitute people

• giving debtors food and shelter

• helping destitute debtors to relocate in less expensive areas

• preventing and solving the problems related to credit overextension.

• getting you more credit

Shortening the term of a loan will reduce total interest charges.

• True

• False

The interest component of each installment loan payment rises over time?

• True

• False

A credit card holder who pays the minimum balance each month will remain in good standing.

• True

• False

Credit card co-branding has become popular with banks and industires.

• True

• False