Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
70. (p. 232) If you default on your automobile loan:
71. (p. 232) The Federal Trade Commission enforces the:
72. (p. 233, Exhibit 7-3) If you receive a phone call from a debt collector:
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
73. (p. 233, Exhibit 7-3) If you receive a phone call from a debt collector, he/she must send you a
written notice within ____________ days.
74. (p. 233, Exhibit 7-3) This morning, you received a phone call regarding a debt you allegedly
owe. If you dispute this debt, you must write to the debt collector and request verification of
the obligation. How many days do you have to send this letter?
75. (p. 233, Exhibit 7-3) A few months ago, you sent a certified letter to a debt collector and
requested verification of a debt the collector says you owe. You know the letter was received
by the collector but you have received no response to your request. Today, you received a
letter threatening court action. What should you do?
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
76. (p. 234, Exhibit 7-4) What is the number one reason why consumers default on their debts?
77. (p. 235, Exhibit 7-5) What is (are) the signal(s) of potential debt problems?
78. (p. 235, Exhibit 7-5) Which one of the following is not a danger signal of potential debt
problems?
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
79. (p. 236) Excessive indebtedness can result in:
80. (p. 237) The Consumer Credit Counseling Service (CCCS) is affiliated with the:
81. (p. 237) Who financially supports the Consumer Credit Counseling Service?
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
82. (p. 237) Which one of the following is a local organization that provides debt counseling
services for families and individuals?
83. (p. 237) Most people who are in debt over their heads are:
84. (p. 237) The CCCS is basically concerned with:
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
85. (p. 237) The CCCS aids families by:
86. (p. 238) The CCCS counseling is:
87. (p. 238) The CCCS sometimes charges a fee if it:
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
88. (p. 238) In addition to the counseling services of the CCCS, nonprofit services are sometimes
provided by:
89. (p. 239) In a Chapter 7 bankruptcy, a person filing for relief is called a:
90. (p. 242) Which form of bankruptcy allows a debtor with a regular income to extinguish his or
her debts from future earnings or other property over a period of time?
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
91. (p. 242) In a Chapter 7 bankruptcy, debtor:
92. (p. 214) Which of the following lenders is most likely to be sympathetic about legitimate
payment problems?
93. (p. 214) Which lender is likely to ask you to write a check for $115 before granting you a
$100 loan?
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
94. (p. 215) Sandra Jennings gets a loan from General Motors Acceptance Corporation. Which
type of lending institution is this?
95. (p. 215) Chuck Stallings qualifies for a credit card from J.C. Penney. Which of the following
offers this type of loan?
96. (p. 221) Chuck Spencer wants to borrow money for three years to purchase a new car. He has
been offered a seven percent fixed rate loan and also a variable rate loan that has an initial rate
of five percent. By choosing the variable rate loan, Chuck is reducing the lender’s risk by:
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
97. (p. 221) Frank West wants to borrow money for three years to purchase a new boat. He has
been offered a seven percent fixed rate loan and also a variable rate loan that has an initial rate
of five percent. By choosing the variable rate loan, Chuck is reducing the lender’s risk by:
98. (p. 221) Anthony Newton wants to buy a new sail boat. He makes a down payment of
$10,000 which represents 20% of the value of the sail boat he is purchasing. In which way is
Anthony reducing his lender’s risk:
99. (p. 222) 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 reducing her lender’s risk by:
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
100. (p. 224) Jerrod Dean starts the month with a balance on his credit card of $1,000. 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 $500. The bank charges 1.5 percent interest
per month using the adjusted balance method. What would Jerrod’s finance charges be for the
month?
101. (p. 224) Jerry Allison starts the month with a balance on his credit card of $1,000. 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 $500. The bank charges 1.5 percent interest
per month using the previous balance method. What would Jerry’s finance charges be for the
month?
Chapter 07 – Choosing a Source of Credit: The Costs of Credit Alternatives
102. (p. 224) Henry Garrison starts the month with a balance on his credit card of $1,000. The
average daily balance for the month including purchase is $883. The average daily balance for
the month excluding new purchase is $750. 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?
103. (p. 224) Randy Ice starts the month with a balance on his credit card of $1000. 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 $500. The average daily balance for the
month including the new purchase is $883. The average daily balance for the month excluding
the new purchase is $750. The bank charges 1.5 percent per month and uses the average daily
balance excluding new purchases method. What would Randy’s finance charges be for the
month?