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WorksheetsCredit and the Consumer: Unit 3 pre-Test
Total questions: 70
Worksheet time: 50mins
Because Mr. Parker is ..., his application for a loan is approved.
creditworthy
profile
on time
character
The bank uses a ... to find out how prospective borrowers repaid their past debts.
profile
loan agreement
credit bureau
budget
The other name for credit bureau is ...
reporting agency
character
passbook loan
loan agreement
Three kinds of data that the computer at the reporting agency has are ...
a person's background
a person's history of borrowing and repayment
a person's employment record
a person's family background
Jen wants to buy a camera. Which method will let her buy now and pay later?
check
cash
credit card
money transfer
Which of the following is an advantage of using a check to pay bills?
You can buy now and pay later.
The money is transferred immediately.
You can pay using money in your account.
You may have to pay interest on the amount.
Angelina made a chart to compare the cost of buying a game console using different payment methods.
The total cost of buying a game console online using automatic payments: _____ x (________+________) =
(a)
Angelina made a chart to compare the cost of buying a game console using different payment methods.
The total cost of buying a game console at Ed’s Discount Store is (a) .
Angelina made a chart to compare the cost of buying a game console using different payment methods.
The total cost of buying a game console using a credit card:
__________+___________=_________
(a)
Which of the following is NOT an advantage of using a debit card as your payment method?
You can buy now and pay later.
A personal identification number helps keep your account safe.
It is convenient to carry around.
You are less likely to overspend.
Each purchase is a loan that is repaid later.
Debit Card
Credit Card
Both
Money is withdrawn directly from a checking or savings account.
Debit Card
Credit Card
Both
A PIN (Personal Identification Number) is required to make a purchase.
Debit Card
Credit Card
Both
Eric purchased a movie ticket with his card. This money will come straight out of his checking account. What card did he use?
Debit Card
Credit Card
Both
Which of the following is an ADVANTAGE of using CASH?
almost impossible to track
can be lost or stolen
limited to spending what you have
people think twice before making an impulse purchase
Which of the following is a DISADVANTAGE of using CASH?
makes sticking to a budget easier
No transaction fees
limited to spending what you have
Instant money on hand
Which of the following is a DISADVANTAGE of using CHECK?
don’t have to carry around a lot of money
reduce the risk of losing money through accident or theft
have a record of purchases made with checks
some businesses do not accept checks.
Which of the following is an ADVANTAGE of using CHECK?
takes time to write a check when you make a purchase.
have a record of purchases made with checks
inconvenient to carry a checkbook
If your checkbook is lost or stolen, others may try to write checks on your account.
Which of the following is an ADVANTAGE of using DEBIT CARD?
enables you to get cash at many locations from ATMs
Debit cardholders who use their cards infrequently may forget their PINs
A debit card can be lost or stolen.
Some people forget to enter amounts for their purchases in a transactions register
Which of the following is a DISADVANTAGE of using DEBIT CARD?
small, so it is convenient and easy to carry around.
You can make purchases quickly and easily using a debit card.
Debit cardholders who use their cards infrequently may forget their PINs
Carrying it is safer than carrying cash or checks
Which of the following is a DISADVANTAGE of using CREDIT CARD?
easy to carry and use
can purchase things now and pay for them later
Fees and interest may be charged for the use of credit cards
are safer to use than cash or checks, since there is a limit on the amount of money that can be lost if the card is stolen
Which of the following is an ADVANTAGE of using CREDIT CARD?
easy to forget that each time a credit card is used, debt is created; too much debt might be difficult to repay
Fees and interest may be charged for the use of credit cards
can purchase things now and pay for them later
none of the above
Which of the following is an ADVANTAGE of using ONLINE PAYMENT?
You can buy goods and services nationwide or internationally.
You may forget your password or user name
If you make a purchase at a non-secure website, you could be a victim of identity theft.
You may pay an additional shipping fee for goods purchased and sent to you
Which of the following is a DISADVANTAGE of using ONLINE PAYMENT?
You can make payments from your home.
It’s convenient.
You don’t need an envelope, stamps, and a walk to the mailbox to send in your payment.
You may pay an additional shipping fee for goods purchased and sent to you
Which of the statements are TRUE about our Prepaid Mobile service? (There are multiple answers)
There is NO contract.
Customers will NOT receive a monthly bill.
Customers can get our Prepaid Service without the need to register with their NRIC.
A Credit Check is not required.
1. What is a prepaid service?
A. It’s a service in which you pre-purchase electricity and then use it.
B. It’s a pay as you go service.
C. It’s a service in which you use the electricity and then pay for it.
D. A and b
Which of the following is NOT a typical type of credit?
Mortgage
Overdraft
Credit Card
Pre-Paid Debit Card
Which of the following could be a SECURED loan? (hint: choose 2 correct answers)
Auto loan
Student loan
Mortgage
Overdraft
What may NOT impact the interest rate on your loans?
Your relationship with the financial institution
Your credit score
The loan amount
Your level of education
How do you avoid paying interest on your credit card (or any other loan for that matter)?
Always make the minimum payment over time
Pay interest 1st, then pay what you can on leftover balance
Always make the full payment on time
Pay the principal 1st, then pay what you can on interest
Interest rate = 2.5%
TIme = 3 years.
How much interest?
The simple interest formula is i = P r t
What does the t represent?
Principle
Interest Rate
Number of times interest is compounded
Number of years
One of the 3 C's of credit that shows a person's willingness to pay is
capital
collateral
character
capacity
One of the 3 C's of credit that refers to property that secures the loan is
capital
collateral
character
capacity
How can you develop a positive credit history?
Use only one type of credit account
Pay cash for almost everything
Open credit cards in your parents names
Maintain a resonable amount of available credit
Your credit score is NOT configured off of which of the following:
Payment history
Amount owed
Where you live
Length of credit history
One of the Four C's of credit that shows a person has filed bankruptcy or have a repossession.
character
capital
collateral
capacity
One of the Four C's of credit that shows a person is willing to give up something in order to pay off a loan.
character
collateral
capital
capacity
This process requires a person to hire an attorney, a person may file Chapter 7 or 11, and this process can remain on a person's credit report for 7 -10 years.
repossession
bankruptcy
collateral
capacity
If person would like a copy of his/her credit report, they can request one through which website?
Annualjobreqest.com
Annualcreditreport.com
Annualpercentagerate.com
Annualbankrate.com
The price of money is referred to as
Interest
Annual Percentage Rate
Credit
Credit Line
Which of the following would NOT request a copy of your credit report?
College President
Landlord
Cell phone company
Utility company
Jason has a FICO score of 450. He has applied for car loan. He should expect to pay a ___________ interest rate.
high
low
What is the correct credit score range?
100-500
200-600
300-850
500-1000
Why is it important to establish positive credit history?
Higher credit scores result in lower interest rates on loans
You are more likely to be offered a loan by a bank
Positive credit history results in higher credit scores
All of the above
How long will a negative credit action usually remain on a credit report?
4 years
11 years
7 years
15 years
Which person would be the highest RISK to borrow money?
Score of 550
Score of 650
Score of 750
Late payments stay on a credit report for ....
up to 3 years
up to 5 years
up to 7 years
up to 15 years
A bad credit report cannot affect my chances for getting a job.
True
False
This is declared when an individual is unable to pay private or business debts.
Broke
Bankruptcy
Insolvency
Liquidation
How many years will a person usually remain bankrupt for?
1
2
3
4
If you are employed by someone else and the court says you own money, part of your paycheck may be withheld to pay your debt. This is called ___.
Garnishment of wages
Repossession of money owed
Partial bankruptcy
Very embarrassing to you
