Quiz 2: Credit Cards, Credit Reports, Credit Scores And Paying For College

37 Questions | Total Attempts: 234

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Quiz 2: Credit Cards, Credit Reports, Credit Scores And Paying For College

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Questions and Answers
  • 1. 
    What strategy (ies) do credit card companies use to market their product and to make them more appealing?
    • A. 

      Use professional athletes or other celebrities in their commercials

    • B. 

      Highlight the fees and costs of using their cards

    • C. 

      Discuss the dangers of carrying too much credit card debt

    • D. 

      All of the above

  • 2. 
    When selecting a credit card, which of the factors listed below SHOULD NOT be considered?
    • A. 

      Interest rate

    • B. 

      Penalties/Fees

    • C. 

      Rewards or incentives

    • D. 

      FDIC-insured

  • 3. 
    True or False.  Two of the benefits that a borrower with a very high credit score (e.g., over 800)  might include a higher likelihood of having their credit application approved as well as the potential for borrowing at lower interest rates.  
    • A. 

      True

    • B. 

      False

  • 4. 
    Indicate all the possible consequences of making a late payment on your credit card. 
    • A. 

      Charged a late payment fee of $35

    • B. 

      Increase in interest rate to the Penalty APR rate, which will be significantly higher

    • C. 

      Increase in rewards offered to cardholder

    • D. 

      Credit score may go down as a result of poor payment history

    • E. 

      A, B and D

  • 5. 
    A cash advance:
    • A. 

      Occurs when a credit cardholder uses their credit card at an ATM to withdraw cash

    • B. 

      Usually results in interest being charged immediately when the withdrawal is made since there is no grace period

    • C. 

      Usually incurs a higher interest rate than standard purchases using a credit card

    • D. 

      All of the above

  • 6. 
    If you plan to pay off your credit card every month and will not be a revolver, which factor will be most important to you in selecting a credit card:
    • A. 

      Interest rate

    • B. 

      Rewards or incentives offered by credit card company

    • C. 

      Quality of credit card commercials

    • D. 

      Location of company headquarters

  • 7. 
    SELECT TWO ANSWERS.  Bank of America VISA is offering an introductory rate of 0% APR and 3% cash back on all purchases.  What TWO questions should the savvy consumer ask when evaluating this program?
    • A. 

      How long will this introductory offer last?

    • B. 

      Can I get two credit cards for my account?

    • C. 

      What will the APR and the cashback rewards be after the introductory period?

    • D. 

      Does Bank of America VISA allow online transactions?

  • 8. 
    Holders of the same credit card brand (for example, the Wells Fargo VISA card), all pay the same interest rate regardless of their creditworthiness.  
    • A. 

      True

    • B. 

      False

  • 9. 
    Which website provides consumers with free credit reports from each of the three credit bureaus on an annual basis?
    • A. 

      Freecreditreports.com

    • B. 

      Freescores.com

    • C. 

      Freecredit.com

    • D. 

      Annualcreditreport.com

  • 10. 
    Indicate which of the statements below is TRUE?
    • A. 

      Your credit report includes information about your salary in it.

    • B. 

      Your credit score is based on the information found in your credit report.

    • C. 

      If you find an error in your credit report, there is no way to correct it.

    • D. 

      Your credit report does not include information about your payment history.

  • 11. 
    SELECT TWO ANSWERS.  The two most important factors in determining your credit score are:  
    • A. 

      Amounts owed

    • B. 

      Length of credit history

    • C. 

      Types of credit used

    • D. 

      Payment history

  • 12. 
    Which of these organizations can see your credit report?
    • A. 

      Lenders you are seeking to borrow from

    • B. 

      Utility companies

    • C. 

      Employers or prospective employers

    • D. 

      Landlord whose apartment you want to rent

    • E. 

      All of the above

  • 13. 
    How long does negative information (for example, late payments or collection accounts) stay on your credit report?
    • A. 

      1 year

    • B. 

      3 years

    • C. 

      7 years

    • D. 

      15 years

  • 14. 
    Provide THREE answers to this question.  The three credit bureaus who collect information from banks and other financial institutions to create your credit report are:
    • A. 

      TransUnion

    • B. 

      TransLucent

    • C. 

      Equifax

    • D. 

      Equilar

    • E. 

      Experian

  • 15. 
    What is the range of FICO (credit) scores that a consumer can have?
    • A. 

      100 to 900

    • B. 

      250 to 1000

    • C. 

      300 to 850

    • D. 

      600 to 1000

  • 16. 
    True or False.  The  higher the FICO score, the less likely the consumer will default (or not pay back) on their loan.  This is why this borrower is likely to get a lower interest rate on their loan.  
    • A. 

      True

    • B. 

      False

  • 17. 
    Which of the following is NOT an example of credit?
    • A. 

      Home mortgage

    • B. 

      Auto loan

    • C. 

      Student loan

    • D. 

      Debit card

    • E. 

      Payday loan

  • 18. 
    The higher interest rate (APR) that most credit card companies charge to a cardholder after a late payment: 
    • A. 

      Balance transfer APR

    • B. 

      Penalty APR

    • C. 

      Penalty fee

    • D. 

      Cashback reward APR

    • E. 

      Purchases APR

  • 19. 
    SELECT TWO ANSWERS.  What are two most important factors that lenders will consider in your application for a loan?
    • A. 

      The length of time that you have had a savings account open

    • B. 

      Your FICO score

    • C. 

      The college you attended

    • D. 

      Your monthly income

  • 20. 
    Investing in your college education makes sense because:  
    • A. 

      Workers with college degrees make more money and have higher unemployment rates than those with high school degrees.

    • B. 

      Workers with college degrees make less money but have lower unemployment rates than high school graduates.

    • C. 

      Workers with college degrees make more money and have lower unemployment rates than high school graduates.

  • 21. 
    Select all the answers that apply.  Which of the following represent "free money" sources that can help you pay for college that never need to be repaid?  
    • A. 

      Subsidized federal student loans

    • B. 

      Cal Grants (for California residents attending California schools)

    • C. 

      Pell Grants

    • D. 

      Private loans

    • E. 

      College scholarships

  • 22. 
    True or False.  The "net price" (your out-of-pocket expenses) for a college education is often significantly LESS than the "sticker price" due to financial aid provided by the college to reduce the cost to those with the greatest financial need.  
    • A. 

      True

    • B. 

      False

  • 23. 
    Which of the following factors should be considered when selecting a college?
    • A. 

      The "net price" of the college/university

    • B. 

      Graduation rates

    • C. 

      Whether college offers the field of study you are interested in

    • D. 

      Quality of the student body based on test scores, GPA and selectivity of admissions

    • E. 

      All of the above

  • 24. 
    In order to qualify for financial aid, prospective college students must file the:  
    • A. 

      Financial Aid Letter

    • B. 

      FAFSA

    • C. 

      Credit Report

    • D. 

      Magna Carta

  • 25. 
    SELECT ALL THE ANSWERS BELOW THAT APPLY.  What lesson(s) were learned in the ten period Investment Game that we played in class (the game involving the dice)
    • A. 

      The pain of losses is felt more deeply than the joy of gains.

    • B. 

      Many investors look to experts for advice given the uncertainty of future outcomes. That is OK since almost all experts are excellent in predicting the short and long term movements of the stock markets.

    • C. 

      "Timing the market," or making decisions on when to exit and enter the market is not difficult since it is usually obvious when the market will fall and then when it will rise again.

    • D. 

      Investors must have "emotional stability" in order to manage through periods when stock market returns can be turbulent.

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