Name:     ID: 
 
    Email: 

Credit Test

True/False
Indicate whether the sentence or statement is true or false.
 

 1. 
All credit cards have an annual fee.     
 

 2. 
Capital refers to the value of the borrower’s assets.
 

 3. 
If you lose your bank credit card and you report it immediately to the credit card company, you are only liable for $500 of what someone might charge on it.
 

 4. 
There are five major credit bureaus that keep track of your credit information in this country.
 

 5. 
When making a purchase using Installment Sales Credit, you normally make a down payment for the item or service being purchased.
 

 6. 
An Open Charge Account is an account where purchases can be charged at any time but at least part of the debt must be paid each month.
 

 7. 
If you don’t have the money to make a large purchase and won’t have it for many months, a credit card is your best way to use credit as it is convenient and generally the credit card company charges a low interest rate.
 

 8. 
It is recommended that you get a copy of your credit report from the different credit bureaus once a year so you can check your credit record and make sure no one is using your personal information to make charges and thus hurt your credit rating.
 

Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 9. 
Anyone who buys on credit or receives a loan is known as a......
a.
debtor
b.
creditor
c.
character
d.
credit references
 

 10. 
Which is not a type of credit as discussed in class?
a.
loan credit
b.
trade credit
c.
charge credit
d.
sales credit
 

 11. 
Anyone who sells on credit or makes a loan is known as a.....
a.
debtor
b.
creditor
c.
character
d.
credit reference
 

 12. 
Which type of credit is used by a business when it receives goods from a wholesaler and pays them at a later specified date?
a.
loan credit
b.
trade credit
c.
charge credit
d.
budget credit
 

 13. 
Which is not considered to be one of the three ‘C’s’ of credit?
a.
capacity
b.
character
c.
capital
d.
compliancy
 

 14. 
Credit is......
a.
the money paid for the use of money.
b.
a business or individual from whom you have received loans in the past.
c.
the planned protection provided by sharing economic loss.
d.
the privilege of using someone else’s money for a period of time.
 

 15. 
When looking at the three ‘C’s’ of credit, which one refers to your ability to pay a debt when it is due?
a.
capacity
b.
character
c.
capital
d.
compliancy
 

 16. 
Which of the following is NOT a benefit of credit for the consumer?
a.
you don’t have to carry lots of cash on your person
b.
allows you to have immediate possession of the item you want
c.
tend to purchase more on credit than if you had to write a check or pay in cash
d.
allows you to buy an item when it goes on sale for potential savings
 

 17. 
Which of the following is NOT a problem of credit for the consumer?
a.
credit use hurts your credit record so you shouldn’t use it any more than you have to.
b.
overuse of credit can result in too much being owed
c.
careless buying may result if you become lazy in your shopping
d.
higher prices may be paid because some businesses will charge more if a purchase is made on credit
 

 18. 
Which is not a type of charge account?
a.
open
b.
budget
c.
revolving
d.
bank
 

 19. 
The additional amount you must pay for using credit is....
a.
interest
b.
finance charge
c.
application fee
d.
usage fee
 

 20. 
Credit cards that can only be used at certain stores and are company specific are called....
a.
bank charge cards
c.
retail store cards
b.
travel & entertainment cards
d.
VISA & Mastercard
 

 21. 
American Express credit cards are classified as a....
a.
bank charge card
c.
oil company credit card
b.
travel & entertainment
d.
retail store credit card
 

 22. 
When is installment sales credit typically used?
a.
when purchasing utilities
b.
when purchasing electricity only
c.
when purchasing furniture & household appliances
d.
when purchasing groceries
 

 23. 
Which is a type of loan discussed in class?
a.
single-payment loan
c.
monthly-payment loan
b.
long-term loan
d.
sales loan
 

 24. 
Which law/act requires prompt correction of billing mistakes when they are brought to the attention of a business in a prescribed manner?
a.
Truth in Lending Law
c.
Fair Credit Reporting Act
b.
Equal Credit Opportunity Act
d.
Fair Credit Billing Act
 

 25. 
A credit bureau does what?
a.
keeps track of your credit record for you
b.
keeps track of your credit record and provides that information to your employer
c.
keeps track of your credit record and sells that information to credit gathers
d.
all of these are correct
 

 26. 
What law/act requires that you be told the cost of a credit purchase in writing before you sign a credit agreement?
a.
Equal Credit Opportunity Act
c.
Fair Credit Reporting Act
b.
Truth in Lending Law
d.
Fair Credit Billing Act
 

 27. 
A report that shows the debts you owe, how often you use credit, and whether you pay your debts on time is known as a.....
a.
finance report
b.
bank record
c.
credit report
d.
credit bureau
 

Completion
Complete each sentence or statement.
 

 28. 
This word refers to your honesty and willingness to pay a debt when it is due. (spell your one-word answer correctly and do not capitalize)
 

 

 29. 
When a consumer charges a purchase at the time they buy the good or service, it is known as ____________ credit.  (spell your one-word answer correctly and do not capitalize)
 

 

 30. 
One type of loan is one in which you agree to make monthly payments in specified amounts over a period of time, with each payment known as a ______________.  (spell your one-word answer correctly and do not capitalize)
 

 



 
Submit          Reset Help