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WorksheetsPF 6.02, 6.03, 6.04
Total questions: 16
Worksheet time: 8mins
Name
Class
Date
1.
Leah is trying to explain the difference between open-end and close-end credit. Which statement should she include about close-end credit?
a)
It is a continuous loan with a revolving balance
b)
Equal payments are required on a regular basis until paid
c)
Credit limits vary
d)
Interest rates vary
2.
When told to keep your use of credit within safe boundaries; that means:
a)
Total amount borrowed, including mortgage and car loan, under 20% of net income
b)
Total amount borrowed, including mortgage and car loan, under 40% of net income
c)
Total amount borrowed, not including her mortgage, under 20% of net income
d)
Total amount borrowed, not including her house, under 40% of her net income
3.
David earns $5000 per month at his accounting job. He has a student loan ($120), and a car loan ($300). Which statement is true?
a)
Total debt is higher than the recommended amount
b)
Student loan s/b subtracted from his car loan payment to determine if he is w/in safe range
c)
Student loan payment is w/in range but not his car loan
d)
Credit payments are w/in the safe range for someone with his income
4.
To answer the essay test question about open-end credit, Ryan should include which statement?
a)
A down-payment must be made before receiving a loan
b)
People 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 doesn't have to apply for credit each time credit is desired
d)
Payments are equal and required to be paid on a regular basis
5.
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 people to file a credit report
6.
How can someone LEGALLY avoid paying interest when use a credit card?
a)
Pay the minimum balance every month before the due date
b)
Pay the balance in full every month before the due date
c)
Limit the use of a credit card to balance transfers only
d)
There is no legal way to avoid paying interest charges
7.
Paying the minimum payment on a credit card every month will:
a)
Pay a large % 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 cardholder create a plan for paying of credit in a decent amount of time
d)
Allow the cardholder to avoid paying any interest charges
8.
Sarah turns 18 next month. She plans to apply for a credit card. Which statement is true?
a)
She cannot obtain a credit card until she turns 21
b)
She will need to use a special application since she is under 25
c)
She can only get a credit card if she has a co-signer or proof of sufficient income to make the required payments
d)
She can obtain a credit card
9.
Megan's credit card statement indicates that she is now paying a penalty APR. Which scenario best describes what may have happened?
a)
Missed making January and February's payments
b)
Her payment has been paid in full each of the last 6 months
c)
Her card had a lower introductory rate; now the rate has increased
d)
New purchase made her account go over the credit limit
10.
Which is a general rule when dealing with credit reports to minimize identity theft?
a)
Check each report once a year
b)
Wait 60 days before disputing wrong information found in a credit report
c)
Keep credit reports in an easily accessible location
d)
Report mistakes to only one credit bureau
11.
Which strategy would be the most effective to decrease the risk of fraudulent use of her credit cards?
a)
Carrying all cards in her wallet so they don't get lost
b)
Signing the back of her card with her signature and "Please see picture ID"
c)
Giving the account numbers over the internet rather than over the phone
d)
Using credit cards for all her purchases so she only needs to pay one bill each month
12.
Which personal information is LEAST LIKELY to be used by scammers?
a)
Phone Numbers
b)
Credit Card Numbers
c)
Bank Account Numbers
d)
Driver's License Numbers
13.
Which of the following is NOT something an identity thief might do with credit card information, your driver's license and debit card?
a)
Rent an apartment under your name
b)
Use your name during an arrest
c)
Make purchases with your credit card
d)
Take a college admissions exam in your name
14.
Which of the following is an act of identity theft?
a)
Receiving permission to use a parents' credit card for school clothes
b)
Wrongfully acquiring and using someone's personal identification
c)
Taking the identity of another individual as inspiration for a costume
d)
Having the same name as another person
15.
Which of the following actions will not make an individual vulnerable to identity theft?
a)
Using a computer without updated spyware
b)
Responding to an email from your depository institution
c)
Paying cash for a movie ticket
d)
Throwing mail in the garbage
16.
What is a safety tip to follow when you are shopping online?
a)
Shred all sales receipts as soon as the item purchased is received
b)
Use a debit card
c)
Use a credit card
d)
Black out the bank account numbers on the credit card bill before returning it with payment
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