9. Which is a major disadvantage of revolving credit?

B. Higher interest rate and risk of overspending

A. Less flexible repayment options

11. This law protects borrowers from lenders who charge interest out of nowhere.

D. Civil Code of the Philippines [Republic Act (RA 386)

A. Consumer Act of the Philippines (RA 7394)

B. Data Privacy Act of 2012 (RA 10173)

C. Truth in Lending Act (RA No. 3765)

12. Why is it important to keep track of or to know your credit standing?

C. Tracking a credit score helps users to see if their financial behaviour is improving or getting worse.

A. For users to brag about the number of loans they have.

B. For users to continue racking up loans and accumulating debts.

D. Keeps you updated on what’s more you can spend on.

E. Keeping track of your credit standing is not important at all.

13. Alger was an infamous lender. He is known for how he lends money to desperate people who want immediate cash. His well-known scheme is lending money to people and making them sign contracts without saying or giving a specific amount of interest. He will then make use of their desperation to make them sign these contracts and will afterwards demand high interest from them. What law was Alger violating in his schemes?

A. Truth in Lending Act (RA No. 3765)

B. Civil Code of the Philippines [Republic Act (RA 386)

C. Consumer Act of the Philippines (RA 7394)

D. Data Privacy Act of 2012 (RA 10173)

16. Which of the statements below is true about short-term and long-term loans?

D. Long-term loans have lower monthly payments than short-term loans.

A. Short-term loans have higher interest rates than long-term loans.

B. Long-term loans have lower interest rates than short-term loans.

C. Short-term loans have lower monthly payments than long-term loans.

E. Short-term and long-term loans have equal interest rates and monthly payments.

17. Why is a consumer credit plan important?

C. Because it helps individuals manage debts responsibly, avoid high debt-to-income ratios, and make smarter borrowing choices

A. Because it encourages people to spend beyond their means without thinking of repayment

B. Because it ensures borrowers can always avoid paying interest on loans

D. Because it guides people in balancing income, expenses, and loan payments

E. Because it guarantees that all borrowers will qualify for unlimited credit

18. Cattleya wanted to build her creditworthiness and improve her credit history. Which of the following actions should she avoid doing?

E. Pile up loans that have high interest rates and pay them as late as possible.

A. Pay loans higher than their minimum amount.

B. Build good habits for managing and paying bills, credit cards, and loans.

C. Monitor and Improve Credit Habits

19. Your friend Anderson is a very forgetful person. He always tends to forget and leave his belongings every time you hang out. It even comes to the point that he lost most of his wallets, where his money and credit card were. As a friend of his, what kind of credit card hazard should you strictly remind him of with regard to his tendencies?

C. Aggressive collection practices

20. Fors has a lot of loans in her name. She always took loans at every chance that she got while also being irresponsible in her payments for them. So unsurprisingly her credit score was at an all-time low and her application for a new auto loan was denied. Which of the following tips for responsible borrowing and comparing loan options would you recommend for her to follow?

B. Limit New Credit Applications

C. Monitor and Improve Credit Habits

E. None of the choices are helpful.

22. Which among the choices below is a good example of credit-building options?

B. Paying less than the minimum amount required.

D. Monitor your credits only if you want to.

E. Do not care about your credit reputation at all.

23. Alfredd failed to repay a loan from his life insurance company, what will happen?

C. The unpaid loan will be deducted from your insurance benefits

A. He will go to jail immediately

B. His policy is cancelled with no refund

D. He will lose his health benefits only

E. His premium will triple immediately

24. Once a credit card gets stolen, credit information can be used for unauthorized transactions that can harm you financially. What do you call this credit card usage hazard?

B. Aggressive collection practices

E. It wasn’t a hazard at all.

25. Which of the statements below is true about short-term and long-term loans?

A. Short-term loans have lower interest rates than long-term loans.

B. Long-term loans have lower interest rates than short-term loans.

C. Short-term loans have lower monthly payments than long-term loans.

D. Long-term loans have higher monthly payments than short-term loans.

E. Long-term and short-term loans have the equal monthly payments.

26. Which among the following is a disadvantage or possible negative outcome of using credit cards?

B. A person may develop a temptation to overspend.

27. Listed below are some laws and rights in the Philippines that protect credit card users from various hazards, except

C. The right to not pay debts and accumulated balance.

A. The right to clear disclosure of terms and charges.

B. The right to fair collection practices.

D. The right to dispute unauthorized transactions.

E. The right to know the clause and conditions of the debt transaction.

28. Xio was looking for a way to borrow funds that can be paid at a later date. Which also at the same time has no collateral and can be accessed conveniently, while not taking the risk of decreasing her creditworthiness and tarnishing her credit history. What is the best course of action she should take?

B. Get a huge loan from a bank.

D. Sign multiple loans at the same time.

29. Zorian and Zach took a flexible loan with the same principal amount and interest rate. The only difference is that Zorain took a short-term loan while Zach took a long-term one. Which of the following scenarios below is true?

C. The total cost that Zach will spend on his loan will be higher than Zorian's total.

A. The total cost that Zach will spend on his loan will be lower than Zorian's total.

B. The total cost that Zorian will spend on his loan will be higher than Zach's total.

D. The total cost that Zach and Zorian will spend on their loans individually will be equal in amount.

E. The total cost that Zorian will spend on his loan will be double than Zach’s total.

30. Which of the following scenarios shows a clear violation of a client's right to ethical debt collection practices?

A. Emlyn threatens his clients and their families when they don't pay their monthly payment on time.

B. Lumian was always considerate to his clients. He often lets some of them pay less than the necessary payment until they can pay the right amount.

C. Anderson treats his clients fairly and always seems to build an amicable relationship with them.

D. Trish was respectful to her clients and will always treat them professionally even if there are some misunderstandings and when there are delays in their payment.

E. All choice violate a client's right to ethical debt collection practices

CHAPTER 5: MANAGING CREDIT

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

1. What do you call the ability of a consumer to acquire a loan through a bank or other financial institution? It is also known as the 'consumer debt'.

A. Consumer Credit Plan

B. Consumer Credit

C. Credit Card

D. Consumer Loan

E. Short-term Loan

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

2. Consumer credit has three broad types. Which among the choices below is not considered as one of its three broad types?

A. Pre-installment credit

B. Revolving credit

C. Installment credit

D. Non-installment loan

E. None of the above

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

3. Helps individuals to borrow responsibly and avoid being financially unstable.

A. Consumer credit

B. Consumer Companies

C. Consumer credit plan

D. Consumer plan

E. Financial plan

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

4. Refers to an individual ability to pay loans. It is also defined by factors such as your credit score, income stability, DTI ratio and credit history.

A. Credit score

B. Credit plan

C. Credit rights

D. Credit worthiness

E. Credit

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

5. Which of the following is an advantage of using a credit card?

A. High interest rates may cause debt accumulation if balances are unpaid.

B. Negative impact on credit score from late payments or maxing out credit limits.

C. Temptation to overspend.

D. Convenience and easy access.

E. Easy to forget and to get lost.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

6. This type of loan can be used for almost anything, such as medical bills, home improvement, travel, or emergencies.

A. Credible Loan

B. Mortgage Loan

C. Student Loan

D. Secured Loan

E. Personal Loan

MULTIPLE CHOICE QUESTION

1 min • 1 pt

7. Leonard wants to take a loan. His ideal loan is something that can be paid monthly with a specific and unchanging amount of payment. What type of consumer loan should Leonard take?

A. Evolving Credit

B. Installment Credit

C. Non-installment Credit

D. Specific Credit

E. None of the above

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CHAPTER 5: MANAGING CREDIT

1. What do you call the ability of a consumer to acquire a loan through a bank or other financial institution? It is also known as the 'consumer debt'.

2. ​Consumer credit has three broad types. Which among the choices below is not considered as one of its three broad types?

3. Helps individuals to borrow responsibly and avoid being financially unstable.

4. Refers to an individual ability to pay loans. It is also defined by factors such as your credit score, income stability, DTI ratio and credit history.

5. Which of the following is an advantage of using a credit card?

6. This type of loan can be used for almost anything, such as medical bills, home improvement, travel, or emergencies.

7. Leonard wants to take a loan. His ideal loan is something that can be paid monthly with a specific and unchanging amount of payment. What type of consumer loan should Leonard take?

9. Which is a major disadvantage of revolving credit?

10. ​They are nonprofit lenders that are part of a company or a group that gives out affordable credit options to fellow group members.

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2. Consumer credit has three broad types. Which among the choices below is not considered as one of its three broad types?

10. They are nonprofit lenders that are part of a company or a group that gives out affordable credit options to fellow group members.