Ch5 Checking Accounts, Credit Scores, And Exam Questions

Test Bank to accompany Grable & Palmer, Introduction to Personal Finance, 2e

Chapter 5 Checking Accounts, Credit Scores, and Credit Cards

1) A(n) ________ is simply your written order to your bank to pay a third party.

A) check

B) receipt

C) invoice

D) endorsement

Diff: 1

LO: 5.1, Section 5.1

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

2) Around what time period were checks introduced into the banking system in Europe?

A) CE 800.

B) CE 1000.

C) CE 1200.

D) CE 1400.

Diff: 2

LO: 5.1, Section 5.1

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

4) The following is an example of what type of endorsement?

For Deposit Only (1357902468), Oconee City Bank, Mary Timberly

A) Blank endorsement.

B) Special endorsement.

C) Restricted endorsement.

D) Deposit endorsement.

Diff: 2

LO: 5.1, Section 5.1

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

5) The following is an example of what type of endorsement?

Signed Mary Timberly.

A) Blank endorsement.

B) Special endorsement.

C) Restricted endorsement.

D) Certified endorsement.

Diff: 2

LO: 5.1, Section 5.1

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

6) The following is an example of what type of endorsement?

Pay to the Order of Mike Smith, Mary Timberly.

A) Blank endorsement.

B) Special endorsement.

C) Restricted endorsement.

D) Payee endorsement.

Diff: 2

LO: 5.1, Section 5.1

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

7) The Federal Deposit Insurance Corporation (FDIC) insures accounts at

A) banks.

B) credit unions.

C) brokerage companies.

D) All of the choices are correct.

Diff: 2

LO: 5.1, Section 5.1

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

8) Mark and Betty want to keep $300,000 of their savings FDIC insured. They could accomplish this by

A) investing $100,000 in a money market mutual fund and $200,000 in a savings account at the bank.

B) dividing it equally into stocks and mutual funds at the brokerage firm.

C) dividing it equally into a mutual fund and a checking account at a bank.

D) dividing it equally and depositing it at two different banks.

Diff: 3

LO: 5.1, Section 5.1

Bloom: Ap

AACSB / IMA: none; none

AICPA: FC: none

Min: 3

9) What is the maximum amount per depositor, per bank, and per owner category that the Federal Deposit Insurance Corporation (FDIC) currently insures against?

A) $50,000.

B) $100,000.

C) $250,000.

D) $500,000.

Diff: 1

LO: 5.1, Section 5.1

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

10) What is the ending balance for the following check register?

A) $1,899.25.

B) $1,201.25.

C) $2,599.25.

D) $2,700.25.

Diff: 2

LO: 5.1, Section 5.1

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 3

11) A check directly from a financial institution made out to a specific payee that you would like to pay is called a

A) certified check.

B) money order.

C) cashier's check.

D) traveler's check.

Diff: 1

LO: 5.1, Section 5.1

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

12) Which of the following could incur fees and penalties on a checking account?

A) The account holder frequently uses an ATM.

B) A customer asks the financial institution not to honor a particular check.

C) The account is inactive.

D) All of the choices are correct.

Diff: 2

LO: 5.1, Section 5.1

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

13) Which of the following is generally required when you write a check?

A) The name of the person or company that will get the money.

B) The date.

C) The amount to be paid.

D) All of the choices are correct.

Diff: 1

LO: 5.1, Section 5.1

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

14) Which of the following acts as a payment trail for transferred funds?

A) The check number and the account number.

B) The account number.

C) The bank routing number.

D) The account number and the bank routing number.

Diff: 2

LO: 5.1, Section 5.1

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

15) How quickly you can access cash is referred to as

A) liquidity.

B) insurance.

C) overdraft.

D) reconciliation.

Diff: 1

LO: 5.1, Section 5.1

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

16) What type of card allows you to make a payment using money that was loaded onto the card without the need of a bank account?

A) Prepaid card.

B) Debit card with PIN.

C) Debit card with signature.

D) Credit card.

Diff: 2

LO: 5.2, Section 5.2

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

17) What type of hybrid method immediately converts paper check payments at the point-of-sale terminal to an electronic form of payment?

A) Check-to-electronic conversion.

B) Automated Clearing House.

C) Peer-to-peer payments.

D) Prepaid card.

Diff: 2

LO: 5.2, Section 5.2

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

18) Mohammed had $750 in his checking account when his debit card was stolen. Assuming the thief made $525 in purchases with the card, how much could Mohammed save by reporting the stolen ATM card within 2 business days after the theft?

A) $50.

B) $525.

C) $475.

D) $500.

Diff: 3

LO: 5.2, Section 5.2

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 3

19) Amara lost his debit card on May 1. He reported it missing the next day; however, $600 had already been purchased with the card without the use of his PIN number. How much of his loss is Amara responsible for?

A) $0.

B) $50.

C) $500.

D) $600.

Diff: 2

LO: 5.2, Section 5.2

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

20) Macario received a $500 prepaid card for graduation. He lost the card on his way home. What is his maximum liability, given the fraud protection offered by prepaid cards?

A) $0.

B) $50.

C) $250.

D) $500.

Diff: 2

LO: 5.2, Section 5.2

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

21) Fees may be incurred on which payment methods?

A) Checking account.

B) Debit card.

C) Prepaid card.

D) All of the choices are correct.

Diff: 2

LO: 5.2, Section 5.2

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

22) Traditional methods of payment include

A) cash.

B) coins.

C) checks.

D) All of the choices are correct.

Diff: 1

LO: 5.2, Section 5.2

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

23) What type of payment can be made electronically without a card?

A) Direct debit.

B) Debit card with a PIN.

C) Debit card with a signature.

D) All of the choices are correct.

Diff: 2

LO: 5.2, Section 5.2

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

24) Measures to minimize the possibility of someone using your cards in a fraudulent manner include

A) reconciling statements monthly.

B) making copies of receipts.

C) saving your account numbers on your phone.

D) keeping all your cards on you to avoid forgetting them.

Diff: 2

LO: 5.2, Section 5.2

Bloom: Ap

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

25) How are most goods and services purchased and money transfers done today?

A) Electronic transactions.

B) Coins.

C) Traditional checks.

D) Cash.

Diff: 1

LO: 5.2, Section 5.2

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

26) What types of fees may be incurred for prepaid cards?

A) Penalty interest rate if payment is late.

B) Overdrafts.

C) Load and reload of funds.

D) All of the choices are correct.

Diff: 2

LO: 5.2, Section 5.2

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

27) What types of fees may be incurred for debit cards?

A) Card balance inquiries.

B) Load and reload of funds.

C) Annual fee.

D) Lost card.

Diff: 2

LO: 5.2, Section 5.2

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

28) Maarku lost his debit card. He reported it immediately before any unauthorized withdrawals were made. How much is Maarku responsible for?

A) $0.

B) $50.

C) $500.

D) $600.

Diff: 2

LO: 5.2, Section 5.2

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

29) Which of the following forms of payment allows a consumer to make purchases over the Internet?

A) Cash.

B) Checks.

C) Prepaid cards.

D) Money orders.

Diff: 1

LO: 5.2, Section 5.2

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

30) In what time frame are the funds transferred from your account to the merchant account when using your debit card?

A) Immediately.

B) The next day.

C) The next business day.

D) In 2 business days.

Diff: 1

LO: 5.2, Section 5.2

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

31) Mainstream financial service providers include

A) payday lenders.

B) check cashers.

C) money order providers.

D) banks.

Diff: 1

LO: 5.3, Section 5.3

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

32) A loan consists of what elements?

A) Principal and interest

B) Interest and loan fees.

C) Principal and loan fees.

D) Principal, interest, and loan fees.

Diff: 1

LO: 5.3, Section 5.3

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

33) A finance charge represents what elements?

A) Interest and principal.

B) Fees and principal.

C) Interest and fees.

D) Interest, fees, and principal.

Diff: 1

LO: 5.3, Section 5.3

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

34) How are finance charges generally stated?

A) As a percentage.

B) As interest.

C) In absolute dollars.

D) As a percentage and in dollars.

Diff: 1

LO: 5.3, Section 5.3

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

35) Ladonna borrowed $2,000 to purchase a used car. The total amount she will need to pay includes the $2,000 she borrowed, $200 in interest, and $75 in loan fees. What is the finance charge on Ladonna's loan?

A) $75.

B) $200.

C) $275.

D) $2,275.

Diff: 2

LO: 5.3, Section 5.3

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

36) Sachi borrowed $7,000 to purchase a used car. The total amount she will need to pay includes the $7,000 she borrowed, $2,400 in interest, and $250 in loan fees. What is the finance charge on Sachi's loan?

A) $250.

B) $2,400.

C) $2,650.

D) $9,650.

Diff: 2

LO: 5.3, Section 5.3

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

37) On January 1, Pablo borrows $5,000 with a fixed annual interest rate on the loan of 10% and a loan term of 2 years. He will be making monthly payments of $230.72. How much of Pablo's first loan payment on February 1 would be principal?

A) $189.05.

B) $190.63.

C) $225.50.

D) $250.28.

Diff: 4

LO: 5.3, Section 5.3

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 3

38) On January 1, Pablo borrows $5,000 with a fixed annual interest rate on the loan of 10% and a loan term of 2 years. He will be making monthly payments of $230.72. How much of Pablo's first loan payment would be interest charged for January, the first month of the loan?

A) $40.09.

B) $41.67.

C) $42.98.

D) $43.67.

Diff: 3

LO: 5.3, Section 5.3

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 3

39) On January 1, Pablo borrows $5,000 with a fixed annual interest rate on the loan of 10% and a loan term of 2 years. He will be making monthly payments of $230.72. How much of Pablo's second loan payment would be interest charged?

A) $41.67.

B) $40.09.

C) $38.50.

D) $36.90.

Diff: 4

LO: 5.3, Section 5.3

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 4

40) On January 1, Pablo borrows $5,000 with a fixed annual interest rate on the loan of 10% and a loan term of 2 years. He will be making monthly payments of $230.72. How much of Pablo's fifth loan payment would be interest charged?

A) $38.50.

B) $36.90.

C) $35.29.

D) $33.36.

Diff: 4

LO: 5.3, Section 5.3

Bloom: S

AACSB / IMA: none; none

AICPA: FC: none

Min: 5

41) On January 1, Pablo borrows $5,000 with a fixed interest rate on the loan of 10% and a loan term of 2 years. He will be making monthly payments of $230.72. How much of Pablo's fifth loan payment would be principal?

A) $190.63.

B) $192.22.

C) $193.82.

D) $195.43.

Diff: 4

LO: 5.3, Section 5.3

Bloom: S

AACSB / IMA: none; none

AICPA: FC: none

Min: 3

42) ________ represents something of monetary value that can be sold in the event that loan payments are not made by the borrower.

A) Collateral

B) Credit

C) Amortization

D) Reconciliation

Diff: 1

LO: 5.3, Section 5.3

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

43) Thomas failed to make his loan payments, and the court ordered his employer to pay his wages directly to his creditor. What is this an example of?

A) Secured wages.

B) Security loan.

C) Garnished wages.

D) Collateral loan.

Diff: 2

LO: 5.3, Section 5.3

Bloom: Ap

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

44) What must loan contracts disclose to credit applicants?

A) Periodic interest rate.

B) Annual interest rate.

C) Annual percentage rate.

D) Periodic percentage rate.

Diff: 2

LO: 5.3, Section 5.3

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

45) What type of loan has an interest rate that fluctuates?

A) Fixed installment loan.

B) Variable installment loan.

C) All loans have an interest rate that fluctuates.

D) All loans have a fixed interest rate.

Diff: 1

LO: 5.3, Section 5.3

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

46) A credit report is a summarized accounting of your ______ history.

A) work

B) earnings

C) credit and earnings

D) credit

Diff: 2

LO: 5.4, Section 5.4

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

47) Which event can have a negative effect on your credit report?

A) Owning stock in a company that declares bankruptcy.

B) Taking out a student loan.

C) Losing your home to foreclosure.

D) All of the choices are correct.

Diff: 2

LO: 5.4, Section 5.4

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

48) Which event can have a positive effect on your credit report?

A) Declaring bankruptcy.

B) Taking out a student loan.

C) Losing your home to foreclosure.

D) Both declaring bankruptcy and losing a home to foreclosure.

Diff: 2

LO: 5.4, Section 5.4

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

49) Which of the following is a national credit bureau?

A) Equifax.

B) TransUnion.

C) Experian.

D) All of the choices are correct.

Diff: 1

LO: 5.4, Section 5.4

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

50) Who maintains housing and credit files on all consumers?

A) Credit bureaus.

B) Banks.

C) Credit unions.

D) Payday lenders.

Diff: 1

LO: 5.4, Section 5.4

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

51) What information is included in your credit report?

A) Education history.

B) Checking account balance.

C) Compensation history.

D) Inquiry history.

Diff: 2

LO: 5.4, Section 5.4

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

52) Your credit report may be viewed for what purpose?

A) Underwriting of life insurance.

B) Determining voter eligibility.

C) Gaining college admittance.

D) Applying for a marriage license.

Diff: 2

LO: 5.4, Section 5.4

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

53) Credit reporting agencies can maintain bankruptcy information on your report

A) for up to 7 years.

B) for up to 10 years.

C) for up to 15 years.

D) forever.

Diff: 1

LO: 5.4, Section 5.4

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

54) How many years can credit reporting agencies maintain negative information (excluding a bankruptcy) on your report?

A) 7.

B) 10.

C) 15.

D) Forever.

Diff: 1

LO: 5.4, Section 5.4

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

55) What information can stay in your credit report forever?

A) Bankruptcy.

B) Borrowing more than $150,000.

C) Foreclosure.

D) All of the choices are correct.

Diff: 2

LO: 5.4, Section 5.4

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

56) What personal information will you need to provide when requesting your credit report?

A) Parents' names.

B) Marital status.

C) Address(es) for the past 2 years.

D) The high school you graduated from.

Diff: 1

LO: 5.4, Section 5.4

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

57) How many days do the credit bureaus have to investigate fraud once you notify them in writing that their information is inaccurate?

A) 10.

B) 20.

C) 30.

D) 60.

Diff: 1

LO: 5.4, Section 5.4

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

58) Negative items on your credit report include which of the following?

A) Accounts sent to collections.

B) Low credit balances.

C) Your request to review your own credit report.

D) All of the choices are correct.

Diff: 2

LO: 5.4, Section 5.4

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

59) The Fair Credit Reporting Act (FCRA) requires Equifax, Experian, and TransUnion to provide you with a free copy of your report once every _____ months.

A) 6

B) 12

C) 18

D) 24

Diff: 1

Diff: 2

LO: 5.4, Section 5.4

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

61) What provides a summary of a person's credit risk?

A) Credit score.

B) Leasing history.

C) Credit application.

D) Credit history.

Diff: 2

LO: 5.5, Section 5.5

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

62) What is the range for FICO scores?

A) 200−600.

B) 250−650.

C) 300−750.

D) 300−850.

Diff: 1

LO: 5.5, Section 5.5

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

63) Having a credit score around 500 means the chance of having a new credit application rejected is

A) low.

B) moderate.

C) high.

D) The answer depends on how the credit score was calculated.

Diff: 2

LO: 5.5, Section 5.5

Bloom: Ap

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

64) The most widely used credit score is the

A) FICO score.

B) risk score.

C) payment score.

D) Vanguard score.

Diff: 1

LO: 5.5, Section 5.5

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

65) Your credit score is built, in part, using what input(s)?

A) Amount of credit.

B) Payment history.

C) Types of credit.

D) All of the choices are correct.

Diff: 1

LO: 5.5, Section 5.5

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

66) The various types of credit you have represents what portion of your score input when calculating your FICO score?

A) 35%.

B) 30%.

C) 20%.

D) 10%.

Diff: 1

LO: 5.5, Section 5.5

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

67) What input makes up the largest portion of your FICO score?

A) Amount of credit.

B) Payment history.

C) New credit.

D) Length of credit history.

Diff: 1

LO: 5.5, Section 5.5

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

68) How does the length of time having an account affect your credit score?

A) The longer, the better your FICO score.

B) The shorter, the better your FICO score.

C) Longevity of an account has no bearing on your credit score.

D) The longevity only matters if you had declared bankruptcy.

Diff: 2

LO: 5.5, Section 5.5

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

69) What impacts your credit score?

A) Race.

B) Marital status.

C) Payment history.

D) Nationality.

Diff: 2

LO: 5.5, Section 5.5

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

70) How will having a credit score of 400 affect your application for new credit?

A) You will likely be approved for new credit.

B) You will likely be rejected for new credit.

C) It will not affect your application.

D) You will likely be approved but charged a high interest rate.

Diff: 2

LO: 5.5, Section 5.5

Bloom: Ap

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

71) How will having a credit score of 575 impact your application for new credit?

A) You will likely be approved for new credit.

B) You will likely be rejected for new credit.

C) It will not affect your application.

D) You may be approved but charged a high interest rate.

Diff: 2

LO: 5.5, Section 5.5

Bloom: Ap

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

72) How will having a credit score of 775 impact your application for new credit?

A) You will likely be approved for new credit.

B) You will likely be rejected for new credit.

C) It will not affect your application.

D) You will likely be approved and receive the best borrowing terms.

Diff: 2

LO: 5.5, Section 5.5

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

73) What represents the total amount of credit lines available compared to how much is used?

A) Utilization ratio.

B) FICO ratio.

C) Vantage ratio.

D) Payment ratio.

Diff: 2

LO: 5.5, Section 5.5

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

74) An example of revolving credit includes

A) credit cards.

B) student loans.

C) mortgage loan.

D) car loans.

Diff: 2

LO: 5.6, Section 5.6

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

75) Which is not a line of credit?

A) MasterCard.

B) BMW Finance loan.

C) Visa.

D) Discover.

Diff: 2

LO: 5.6, Section 5.6

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

76) Which of the following is a loan that can be used at the borrower's discretion and convenience and has flexible repayment options?

A) Credit cards.

B) Fixed payment loan.

C) Amortized loan.

D) None of the choices are correct.

Diff: 2

LO: 5.6, Section 5.6

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

77) Some people refer to credit cards as ________ loans.

A) amortized

B) mortgage

C) personal

D) revolving

Diff: 2

LO: 5.6, Section 5.6

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

78) Credit card costs can include

A) annual fees.

B) interest.

C) account set-up fee.

D) All of the choices are correct.

Diff: 1

LO: 5.6, Section 5.6

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

79) Amar owes $2,000 on his credit card with a minimum percentage of 4% or $60, whichever is higher. How much is the minimum payment due?

A) $60.

B) $80.

C) $140.

D) $2,000.

Diff: 2

LO: 5.6, Section 5.6

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

80) Josiah owes $3,500 on his credit card with a minimum percentage of 3% or $100, whichever is higher. How much is the minimum payment due?

A) $100.

B) $105.

C) $200.

D) $3,500.

Diff: 2

LO: 5.6, Section 5.6

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 2

81) Travel and entertainment cards use which of the following payment networks?

A) MasterCard.

B) Visa.

C) American Express.

D) All of the choices are correct.

Diff: 2

LO: 5.6, Section 5.6

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

82) Which of the following is an individual, in addition to the borrower, who will be held responsible for repayment of the debt?

A) Originator.

B) Co-signer.

C) Co-lender.

D) Only the actual borrower can be responsible.

Diff: 1

Diff: 2

LO: 5.6, Section 5.6

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

84) ________ provide their owners with benefits linked to how much they purchase with their card.

A) Secured credit cards

B) Prepaid debit cards

C) Reward credit cards

D) All of the choices are correct

Diff: 1

LO: 5.6, Section 5.6

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

85) Annual percentage rates (APRs) associated with a credit card can include

A) introductory APR.

B) balance transfer APR.

C) cash advance APR.

D) All of the choices are correct.

Diff: 2

LO: 5.6, Section 5.6

Bloom: C

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

86) ________ is the amount of time allowed to pay a bill without incurring interest.

A) A grace period

B) 30 days

C) An introductory period

D) 60 days

Diff: 1

LO: 5.6, Section 5.6

Bloom: K

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

87) If you have no credit history and want to get a credit card, you could

A) apply for a rewards credit card.

B) ask your bank to convert your debit card into a credit card.

C) ask someone with a good credit history to be a co-signer on the credit card account.

D) None of the choices are correct.

Diff: 2

LO: 5.6, Section 5.6

Bloom: Ap

AACSB / IMA: none; none

AICPA: FC: none

Min: 1

88) Tamela's credit card has a balance of $1,200. The minimum payment due is $36. The APR is 24%. How much interest will she pay this month (30 days in billing period)?

A) $21.89.

B) $22.48.

C) $23.16.

D) $23.69.

Diff: 3

LO: 5.6, Section 5.6

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 3

89) Miles's credit card has a balance of $2,200. The minimum payment due is $88. The APR is 21%. How much interest will he pay this month (30 days in billing period)?

A) $37.95.

B) $40.26.

C) $40.76.

D) $41.96.

Diff: 3

LO: 5.6, Section 5.6

Bloom: A

AACSB / IMA: none; none

AICPA: FC: none

Min: 3

90) Mia's credit card has a balance of $7,500. The minimum payment due is $300. The APR is 23%. If she pays only the minimum payment this month (30 days in billing period), how much of the payment will go toward principal?

A) $141.75.

B) $146.85.

C) $158.25.

D) $161.65.

Diff: 4

LO: 5.6, Section 5.6

Bloom: S

AACSB / IMA: none; none

AICPA: FC: none

Min: 4