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Exam 7: Choosing a Source of Credit: the Costs of Credit Alternatives

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Question 21

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Sandra Jennings gets a loan from General Motors Acceptance Corporation.Which type of lending institution is this?

A) Credit union
B) Check casher
C) Finance company
D) Department store
E) Commercial bank

F) A) and D)
G) B) and E)

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Question 22

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What are the various methods used to calculate interest?

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The various methods used to calculate in...

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Question 23

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The Consumer Credit Counseling Service (CCCS)counseling is usually free.

Which of the following is true if your credit company invites you to skip a monthly payment without a penalty?

You have two choices in declaring personal bankruptcy: Chapter 7 and Chapter 13 bankruptcy.

The number of credit union members has been:

The CCCS is also concerned with:

Shelly Sanders gets a loan for $3,000 and repays the loan in 12 monthly payments of $258 per month.Under the APR formula,what is the amount of interest included in her first payment?

What are two key concepts to remember if you are thinking of borrowing money or opening a credit account? Describe each concept.

If you want to minimize your borrowing costs,you may need to accept conditions that reduce the risk for your lender.

You have the right to file your own bankruptcy case and to represent yourself at all court hearings.

Which method of payment is almost always cheaper than using credit?

Henry Garrison starts the month with a balance on his credit card of $800.The average daily balance for the month including purchase is $683.The average daily balance for the month excluding new purchase is $550.The bank charges 1.5 percent per month and uses the average daily balance including new purchases method.What would Henry's finance charges be for the month?

If you pledge property or other assets as collateral,you will probably pay a higher interest rate on your loan than you would without collateral.

Patricia Newton is going to buy a new car,and she needs to apply for a loan to cover the purchase.She knows she can get a loan for up to 6 years,but she would prefer a shorter-term loan.She selects a 4-year loan.Patricia is lowering her lender's risk by:

Which of the following is not true of CCCS counseling?

Jerry Allison starts the month with a balance on his credit card of $800.On the 10th day of the month,he purchases $200 in clothes with his credit card.On the 15th day of the month he makes a payment on his credit card of $300.The bank charges 1.5 percent interest per month using the previous balance method.What would Jerry's finance charges be for the month?

Which type of debt would not be forgiven in a straight bankruptcy?

Which one of the following is not a danger signal of potential debt problems?

In addition to the Consumer Credit Counseling Service (CCCS),alternative counseling services (universities,credit unions,military bases,and state and federal housing authorities)sometimes provide nonprofit counseling services.