Wise-Credit Part II

Using someone else's money, promising to repay at a future date, and paying a fee for use of the money, is the definition for:

• Interest

• Credit

• Investing

• Taxation

What is a credit score?

• A number used to determine how much credit to extend to a person.

• A measure used to indicate a person’s gross wealth.

• A reward system that is based on the number of credit cards a person has.

• A formula based solely on a person’s earnings.

You can continue to charge purchases on your credit card when:

• The amount you owe on this credit card is above your credit limit.

• Your payments are always received by the due date.

• The amount you owe on the card is below your credit limit.

• You can afford the monthly repayments.

One of Andre's seldom-used credit cards has been stolen without his knowledge. When he gets his monthly statement, he realizes that someone else has been using the card and reports it stolen. The maximum amount of the unauthorized purchases he is he liable for is:

• zero

• $50

• The total amount

• $25

Ms. Jackson contacted a mortgage company about refinancing her mortgage. The mortgage company gave her a home loan with unusually high costs and without regard to her ability to repay. This practice is called:

• Redlining

• Low-Income Lending

• Predatory Lending

• Consumer Lending

Ellen, Barbara, and Paul all charged $1,000 on their credit cards last year. Who paid the most in finance charges?

• Ellen, who generally pays off her credit card in full but occasionally will pay the minimum when she is short of cash

• Barbara, who always pays off her credit card bill in full after she receives it

• Paul, who only pays the minimum amount each month

• They all paid about the same since the method of payment per month does not influence the finance charge

The definition of credit is:

• Using someone else's money, promising to repay in the future for a fee

• Interest on money borrowed

• Using your money to finance a purchase

• Using someone else’s money to buy goods and services

Predatory lending practices do not include which of the following:

• A creditor knocking on your door and agreeing to refinance your mortgage without looking at your credit history

• An individual agreeing to a high cost loan with excessive fees

• A lender who expects a loan to be refinanced when you are unable to make payments

• A loan that you can afford with an interest rate that is the same as the interest rate being charged by at least three other financial institutions

Jane opened her credit card bill and was surprised by the amount she owed. She cannot pay the full amount of the bill this month. The lowest dollar amount Jane is required to pay by the credit card company is the:

• Monthly fee payment

• Principal Payment

• Minimum Payment

• Interest payment

A good practice when using credit cards is to routinely

• take advantage of major sales.

• use one credit card to pay debt on another credit card.

• pay the complete balance each month.

• accept all pre-approved credit card offers.