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Chap 7 Study Guide
Study Guide for Money Matters Chapter 7 Test
| Question | Answer |
|---|---|
| Responsible shopping means always selecting the item with the lowest price. | False |
| Financial responsibility does not allow for the pursuit of personal interests, hobbies, or cultural events. | False |
| Spending money on luxury items while basic needs are not being met is an example of financial irresponsibility. | True |
| If you report a lost or stolen credit card to the credit card company, you will not be held responsible for charges you did not make. | True |
| A buying plan focuses only on items that you can afford to buy now. | False |
| Once you formulate a buying plan, you should stick to it no matter what. | False |
| Credit is the ability to borrow money and pay it back later, usually without interest. | False |
| A good way to get started with credit is to open a checking account and get a debit card. | True |
| Service credit is often provided by utility companies and doctors. | True |
| A cosigner with good credit may be required by the bank if there is no collateral for the loan. | True |
| Finance charges increase the cost of items purchased by a credit card. | True |
| No interest is charged on the unused portion of a line of credit. | True |
| A lender of a variable-rate loan may adjust the interest rate at any time but must provide a 30-day notice. | False |
| A person who borrows money is called a creditor. | False |
| The balance on a charge card must be paid in full each month. | True |
| Systematic decision making | requires you to be financially responsible, is the process of making choices that reflect your goals and considers all of the pros and cons as well as the costs. |
| This is not a reward of being financially responsible | an easy life |
| This is not one of the five steps of creating a buying plan | choose a payment method |
| This is not an advantages of using credit | decreased purchasing power |
| The interest rate that banks offer to their most creditworthy business customers is the | prime rate |
| This is not a cost of financial irresponsibility | low or no income |
| Implementing a buying plan involves | comparison shopping |
| Three methods used to compute interest charges on revolving credit accounts include | adjusted balance method, previous balance method, average daily balance method |
| Under the provisions of current credit card legislation, credit card companies | can raise minimum payments by up to twice the existing percentage |
| All this are NOT true of a credit card with a fixed interest rate | the rate can be changed with 60 days' notice, . a rate change can be applied to existing balances, and the rate cannot be changed |
| he total dollar amount of all interest and fees you pay for the use of credit is called the | finance charge |
| regret over a buying decision you have made. | buyer's remorse |
| a refund of part of the purchase price of an item. | rebate |
| a fee charged for violating a term of a credit agreement | penalty |
| cards which require payment of the balance in full each month | charge cards |
| often used to finance a single high-priced item through a series of equal payments made over a set period of time | installment credit |
| the ability to receive services and pay for them later. | service credit |
| Property that can be used as security for a loan | collateral |
| rate that goes up and down with inflation and other economic conditions | variable interest rates |
| symptoms of financial irresponsibility | Bills not paid in a timely manner, money spent on luxury items while basic needs are not met, a month's paychecks don't last the month, borrowed money is not repaid in a timely matter or at all, and there is inadequate resources to live comfortably. |
| a line of credit differs from a consumer loan | A line of credit is a pre approved amount that can be borrowed on demand with no collateral. No interest is charged on the unused portion of a line of credit. A consumer loan is a direct loan of cash made to a consumer at a fixed interest rate. |
| advantages to consumers of using credit | Advantages to consumers using credit may include: increased purchasing power, security, convenience, leverage, and benefits like rewards programs. |
| credit which allows the account holder to charge to the account repeatedly and have an ongoing balance. Examples are MasterCard and Visa. | revolving credit |
Created by:
mrstephens