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CHAPTERS 6-10 - Chapter 6 Review Questions True/False 1...

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Chapter 6 Review Questions True/False 1. Using credit is the ideal way to provide for financial emergencies. 2. Having a checking account tells a creditor that you have some experience in managing your own funds. 3. A debt safety ratio of 10% would generally be a signal of financial trouble ahead. 4. The Wage Earner Planner allows debtors to keep their assets. 5. The required monthly payment on an open account will be the larger of a minimum dollar amount or a specified percentage of the balance. 6. The most popular travel and entertainment credit card is Diners Club. 7. College alumni organizations could sponsor an affinity credit card. 8. A credit applicant will be granted credit only after establishing a complete file at the local credit bureau. 9. The more credit cards one has, the better one’s credit score. 10. Generally, finance charges are compared only on the unpaid balance from previous months’ purchases. Multiple Choice 1. is a benefit of borrowing. a. The ability to buy expensive goods while spreading the payments over time. b. Providing payments that fit into a budget. c. Having a permanent record of transactions. d. Being able to purchase goods and services when checks are not acceptable. e. All of these are benefits. 2. In order to establish her own credit history a woman should a. use her legal name. b. use her husband’s name. c. file a credit report with her husband. d. use a social title, such as “Mrs. Jennifer Wysor”. e. none of these. 3. As a percent of your take-home pay your monthly consumer credit payments should not exceed
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4. Which of the following types of credit cards always have an annual fee? 5. The most prestigious of credit cards is currently the 6. John uses his bank credit card frequently; however, he always pays off the total balance on the card each month. What should John look for in a credit card given the way he uses a credit card? a. Low annual fee and short grace period b. Low annual fee and low interest rate c. No annual fee and short grace period d. No annual fee and long grace period e. High annual fee and low interest rate 7. does not represent a line of credit.
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