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Chap 7 Study Guide

Study Guide for Money Matters Chapter 7 Test

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



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