1 A) the monthly payment will be greater. B) the total interest on the loan will be greater. C) the total interest on the loan will be smaller. D) the monthly payment will be smaller. 2 A) to avoid having to save in order to purchase something. B) to spread the payments over a long period. C) to avoid paying interest. D) to get things immediately. 3 A) If I use credit, will the satisfaction I get from the item I buy be greater than the interest paid? B) If I pay cash, what will be my opportunity cost? C) When will I need to replace the new item? D) Can I postpone purchasing this item until later? 4 A) In general, credit unions offer lower interest rates on savings and charge higher interest rates on loans than other financial institutions. B) Savings and loan associations are similar to savings banks in that most of their business comes from savings accounts and home loans. C) Commercial banks offer a narrow range of services, but control the largest amount of money. D) Consumers with a poor credit history can usually borrow money from consumer finance companies at low rates of interest. 5 A) interest is charged each month even if the bill is paid in full. B) both require the bill to be paid in full each month in order to make additional purchases. C) interest is charged each month on any unpaid portion of the bill. D) neither account has a credit limit. 6 A) consumers must pay the bill in full each month. B) credit cards give consumers access to loans at all times without having to apply for them. C) credit cards can be used at many different stores, restaurants, hotels, and businesses. D) credit cards allow people to make purchases without paying cash at the time of purchase. 7 A) The finance charge is fixed, or the same, among all creditors. B) The annual percentage rate is usually the same as the interest rate. C) The annual percentage rate is expressed in dollars and cents, and the finance charge is the cost of credit expressed as a yearly percentage. D) The finance charge is the cost of credit expressed in dollars and cents, and the annual percentage rate is the cost of credit expressed as a yearly percentage. 8 A) capacity to pay, age, and collateral. B) character, education, and collateral. C) history of credit use, capacity to pay, character, and collateral. D) capacity to pay, marital status, and character. 9 A) keep track of their charges and notify the credit card issuer immediately if the card is lost or stolen. B) pay their bills on time and notify the credit card issuer if the card is lost or stolen. C) pay their bills on time, keep track of their charges, and maintain control over debt. D) pay their bills on time and keep track of their charges. 10 A) it protects consumers from a creditor making changes in the APR, in the way charges and fees are calculated, and in the payment schedule without informing them. B) it makes it illegal for a creditor to require an applicant's spouse to sign unless the application for credit was made jointly by husband and wife. C) loan applicants must receive notice of a decision within 30 days, and if credit is denied the lender must give the reasons. D) it prohibits discrimination in giving credit on the basis of sex, race, color, religion, national origin, marital status, age, or receipt of public assistance. 11 A) prevent abuse by professional debt collectors. B) protect the privacy and accuracy of information in a credit check. C) prohibit discrimination in giving credit. D) restrict the amount of interest that can be charged for credit. 12 A) Declaring personal bankruptcy discharges debtors of all of their debts, except for taxes. B) Individuals who declare personal bankruptcy can easily reestablish credit and start over. C) When debtors declare personal bankruptcy, they give most of what they own to be distributed to their creditors. D) It is very difficult to reestablish credit as long as bankruptcy proceedings remain on a credit record.
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