WorksheetsPersonal Finance-Chapter 18-Cost of Credit
Total questions: 25
Worksheet time: 13mins
Name
Class
Date
1.
Before making a major purchase, you should limit your shopping to one store that offers good credit terms.
a)
True
b)
False
2.
The type of credit selected affects the cost of credit.
a)
True
b)
False
3.
The creditor has the responsibility to read and understand credit terms before buying.
a)
True
b)
False
4.
Garnishment is a legal process that allows part of your paycheck to be withheld for payment of a debt.
a)
True
b)
False
5.
Too much unused credit may cause a potential creditor to consider you a poor risk.
a)
True
b)
False
6.
As your income increases, you should increase your outstanding credit.
a)
True
b)
False
7.
Having many credit cards give you greater flexibility when shopping.
a)
True
b)
False
8.
Phishing is a scam that uses online pop-up messages or e-mail to deceive you into disclosing personal information.
a)
True
b)
False
9.
If you carefully time your purchases, you can take up to 60 days to pay off a charged item without paying any finance charge.
a)
True
b)
False
10.
Keep a list of your credit card numbers, their expiration dates, and the phone number and address of each card company in a safe place.
a)
True
b)
False
11.
When making an online transaction, always look for your browser's symbol that indicates a secure site before entering your personal information.
a)
True
b)
False
12.
The amount of money you borrow is called the balance.
a)
True
b)
False
13.
The rate of interest is expressed as a percentage.
a)
True
b)
False
14.
The time for repayment of a loan is always expressed as a fraction of 12, because payments are made on a monthly basis for installment agreements of all kinds.
a)
True
b)
False
15.
When computing interest, if time is based on days, the denominator is 360 unless otherwise stated.
a)
True
b)
False
16.
The average daily balance is computed by adding together all daily balances and dividing by the number of days in the billing cycle.
a)
True
b)
False
17.
The most expensive way to figure the finance charge for the credit user is the ____
a)
average daily balance method
b)
previous balance method
c)
adjusted balance method
d)
APR
18.
Subtracting payments made before computing the charge describes the ____
a)
previous balance method
b)
average daily balance method
c)
adjusted balance method
d)
annual percentage rate method
19.
The length of time a borrower takes to repay a loan is always expressed as a ____
a)
percentage
b)
rounded number
c)
decimal
d)
fraction
20.
Most billing cycles are of what length?
a)
10 days
b)
25 to 30 days
c)
60 days
d)
90 days
21.
Which of the following is a false statement?
a)
there are ways to safeguard your credit when shopping online
b)
using credit allows for saving
c)
using credit wisely will not help you beat inflation
d)
the type of loan makes a difference in its cost
22.
It is not wise to charge anything under ____
a)
$25
b)
$50
c)
$75
d)
$100
23.
Credit above what you owe, but not up to the maximum, is called ____
a)
unearned credit
b)
unused credit
c)
excess credit
d)
risky credit
24.
The prime rate charged by banks will be ____ the rate for consumer loans.
a)
lower than
b)
higher than
c)
the same as
d)
no way of telling
25.
The difference between cash price and total price when installment payments are made is called ____
a)
full disclosure
b)
cost of credit
c)
add-on interest
d)
discount interest
100 %
