Understanding Credit and Debt Management

What is a credit card cash advance?

• A loan taken out against your credit card limit

• A reward program offered by credit card companies

• A discount on your credit card bill

• A method to increase your credit score

Which act requires lenders to disclose the terms and cost of credit to consumers?

• Fair Credit Reporting Act

• Truth in Lending Act

• Credit Card Accountability Responsibility and Disclosure Act

• Fair Debt Collection Practices Act

What is a consequence of only paying the minimum payment due on a credit card bill?

• Immediate increase in credit score

• Accumulation of interest and longer repayment period

• Reduction in credit limit

• Elimination of all debt

What is the debt to credit ratio?

• The ratio of your total debt to your total income

• The ratio of your credit card balance to your credit limit

• The ratio of your savings to your expenses

• The ratio of your monthly payments to your annual income

Which of the following is NOT one of the three leading credit reporting agencies?

• Equifax

• TransUnion

• Experian

• FICO

What should you do if your credit card is lost or stolen?

• Wait a week to see if it turns up

• Report it immediately to the credit card issuer

• Use it until it is found

• Ignore it and apply for a new card

How does the length of debt repayment impact the cost of the debt?

• Longer repayment periods decrease the total cost

• Longer repayment periods increase the total cost

• Length of repayment does not affect the cost

• Shorter repayment periods increase the total cost

What should a person do if they think they are a victim of identity theft?

• Ignore it and hope it resolves itself

• Report it to the police and credit bureaus

• Change their phone number

• Close all bank accounts immediately

Which of the following is a characteristic of predatory loans?

• Low interest rates

• Transparent terms and conditions

• High fees and hidden terms

• Flexible repayment options

What is collateral in the context of loans?

• A type of unsecured loan

• An asset pledged to secure a loan

• A loan with no interest

• A reward for timely payments