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WorksheetsPF 6.01-6.03: Katelyn and Dalia
Total questions: 17
Worksheet time: 36mins
Name
Class
Date
1.
Becky no longer wants to use her Clothes-R-Us credit card. What is the best thing she can do with the credit card?
a)
File the credit card away for use at a later time.
b)
Let a family member take over the credit account so her credit score will not be affected.
c)
Keep the credit card in her wallet in case she needs proof of identification.
d)
Close the account by phone and in writing then destroy the card.
2.
Which of the following is not included in an individual's credit report?
a)
Current and past addresses
b)
Account balances
c)
Bankruptcies and foreclosures
d)
Medical Information
3.
When Bryce attempted to borrow money at the bank, he learned that his credit score is low. Which statement best describes what this is likely to mean for Bryce?
a)
The interest rates on his loan will be lower since his credit score is low.
b)
The purchase price of the item he needs the loan for will be higher due to his low credit score.
c)
The monthly loan payments will be lower due to his lower credit score.
d)
The interest rates on his loan will be higher since his credit score is low.
4.
Jake's credit application has been declined because of his negative credit history. Which statement is most likely to be true?
a)
Jake pays his bills consistently and on time.
b)
Jake has applied for four credit cards and a car loan in the past six weeks.
c)
Jake received three traffic tickets in the past two months.
d)
Jake holds two store credit cards, a bank credit card, a car loan, and a mortgage.
5.
Jenny is 18 years old and has applied for credit for the first time. Her credit application was declined because she has no credit history. What would you recommend Jenny do to build a positive credit history?
a)
Jenny should acquire several credit cards to establish that she can manage them responsibly.
b)
Jenny should obtain a secured credit card.
c)
Jenny should re-apply for the same credit but include a letter of recommendation from someone who knows her well and can vouch for her character.
d)
Jenny should apply for a different type of credit. Since she was applying for a bank loan she should apply for a credit card.
6.
When may a person view his/her credit report for free?
a)
At any time and an unlimited number of times.
b)
Once a year from each of the three main credit reporting agencies.
c)
A person may not review his/her credit report.
d)
If a person has sufficient financial resources.
7.
Which is not an example of a data furnisher?
a)
Landlord
b)
Credit Card Company
c)
Utility Company
d)
Medical Provider
8.
Edward wants to develop a positive credit history. How should he do this?
a)
Maintain reasonable amounts of available credit.
b)
Have one type of credit account.
c)
Pay cash for the majority of purchases.
d)
Open credit accounts in his parents' name.
9.
To answer the essay test question about the meaning of open-end credit, Ryan should include which statement?
a)
A down payment must be made before receiving a loan.
b)
Individuals are allowed to borrow an unlimited amount of money as long as they pay it back.
c)
Credit is extended in advance so the borrower does not have to apply for credit each time credit is desired.
d)
Payments are equal and required to be paid on a regular basis.
10.
Evan is writing a scholarship essay about the importance of responsible money management. He wants to explain the meaning of borrowing. Which statement below would explain the importance of understanding the process of borrowing money?
a)
When you are borrowing you are spending future income.
b)
Borrowing is an important part of a responsible financial plan.
c)
Borrowing strongly affects the present self but has less impact on the future self.
d)
Borrowing builds a strong credit history because it requires individuals to file a credit report.
11.
The financial counselor that Ariel consulted about her use of credit recommended that she keep her use of credit within safe boundaries. Ariel's financial counselor most likely told her to:
a)
Keep the total amount of money she has borrowed, including her mortgage and her car loan under 20% of her net income.
b)
Keep the total amount of money she has borrowed, including her mortgage and her car loan under 40% of her net income.
c)
Keep the total amount of money she has borrowed, not including her house, under 20% of her net income.
d)
Keep the total amount of money she has borrowed, not including her home, under 40% of her net income.
12.
David earns $5,000 per month at his accounting job. He has a student loan payment of $120, a car loan of $300. Which statement is true?
a)
David's total credit payments are higher than the recommended amount for someone earning his income.
b)
David's student loan payment must be subtracted from his car loan payment to determine whether his overall credit payments are within the safe range.
c)
David's student loan payment is withing the safe range but his car loan is not.
d)
David's credit payments are within the safe range for someone with his income.
13.
Sarah will turn 18 next month. She plans to apply for a credit card. Which statement is true?
a)
Sarah cannot obtain a credit card until she turns 21.
b)
Sarah will need to use a special application since she is under 25.
c)
Sarah can only obtain a credit card if she has a co-signer or proof of sufficient income to meet the requirements.
d)
Sarah can obtain a credit card by filling out an application as long as she waits until after her 18th birthday.
14.
Leo is trying to explain the difference between open-end and closed-end credit to her roommate. Which statement should she include in her description of closed-end credit?
a)
It is a continuous loan the borrower must repay with a revolving balance.
b)
Equal payments are required on a regular basis until loan is repaid.
c)
Credit limits vary depending on the loan balance.
d)
Interest rates vary depending on the repayment history.
15.
Paying the minimum payment on a credit card every month will:
a)
Pay a large percentage of the total balance owed every month.
b)
Make the final amount paid substantially higher than the amount initially charged to the card.
c)
Help the card holder create a plan for paying of a credit card in a decent amount of time.
d)
Allow the cardholder to avoid paying any high interest charges.
16.
Tyler is trying to be responsible in using his new credit card and has heard there is a way to avoid paying interest on the things charges. How can he legally avoid paying interest when using his credit card?
a)
Tyler needs to make sure he pays the minimum balance every month before the due date on the credit card statement.
b)
Tyler needs to pay the credit card balance in full every month before the due date listed on the credit card statement.
c)
Tyler needs to limit the use of his credit cards to balance transfers only.
d)
Tyler needs to understand that the use of a credit card requires paying interest. There is no legal way for him to avoid paying interest.
17.
Megan's credit card statement indicates that she is now paying a penalty APR. Which scenario best describes what may have happened?
a)
Megan has missed her January and February credit card payments while she was participating in her college's study abroad program when the friend she left in charge of sending the payments forgot.
b)
Megan's credit card payment has been paid in full each of the last 6 months.
c)
Megan's card had a lower introductory interest rate for the first year and now the interest rate has increased, as stated on her contract.
d)
The new computer Megan purchased made her account go over the limit for one week, until the credit card company processed her credit card statement.
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