FCS 340 (Money Management) EXAM 2
SUMMARIZED STUDY GUIDE QUESTIONS AND
VERIFIED SOLUTIONS 100% ACCURATE AND
VERIFIED
If you miss payments on a home equity loan, you can lose your
home
What does the term "convenience user" mean as it pertains to credit?
Somebody who pays it off when the bill comes in; For convenience so that they don't
have to carry cash
Experts suggest that the debt payments-to-income ratio should be a maximum of
28:36 (20% of less)
How do you calculate the debt-to-equity ratio? What loans are not to be included?
Total liabilities/Net worth = Debt-to-equity ratio (Home Loans should not be
included) Should be less than 1.
FICO scores generally range from
350-850
What steps can you take if your credit application is denied?
Find out why you were denied (contact credit bureau); Work on making payments on
time/paying on stuff
What information does a credit report include?
# of accounts you have, whether you pay your bills on time, how much available
credit your are using, any collections against you, amount of out standing debt, age
of your accounts
,Name the three credit bureaus.
Equifax, Transunion, Experian
Name the only online source authorized to provide a free credit report each year
at your request
www.anualcreditreport.com
Information about a personal bankruptcy may be reported in your credit file for
10 years
The APR is the percentage cost of credit on a(n) ______ basis
annual
The minimum monthly payment on a credit card is the ___________amount you can
pay and remain a borrower in _______________.
smallest; good standing
If you double the monthly payment for a credit card, the loan will be paid off in
_________ than half time
less
What does the Consumer Credit Counseling Service do?
provide debt counseling services for families and individuals with serious financial
problems...sometimes charges a small fee to help pay administrative costs
Personal bankruptcy can be filed under which section(s) of the U.S. bankruptcy
code?
Chapter 7 & Chapter 13
Define comparison shopping:
process of considering alternative stores, brands and prices
Define impulse shopping:
involves unplanned purchasing, which can result in financial problems
, What is unit pricing?
Unit Pricing = Standard unit of measurement.
Allows you to COMPARE products.
Coupons and rebates
More store convenience → higher prices
Ready-to-use products → higher prices
Large is not always the best buy - check unit prices
"Sale" prices not always a savings
Online sources can save time
created by the seller or manufacturer and has two forms: the full warranty and the
limited warranty
Express warranty
covers only certain aspects of the product, such as parts, or requires the buyer to
incur part of the costs for shipping or repairs
Limited warranty
states that a defective product can be fixed or replaced during a reasonable
amount of time
Full warranty
covers a products intended use or other basic understandings that are not in
writing
Implied warranty
List disadvantages of a car lease
- No ownership interest
- You must meet
- May requirements additional costs may be incurred for extra mileage, certain
repairs, turning the car in early, or even a move to another state
price the dealership pays for the car
*check invoice prices at consumerreports.org and edmunds.com
SUMMARIZED STUDY GUIDE QUESTIONS AND
VERIFIED SOLUTIONS 100% ACCURATE AND
VERIFIED
If you miss payments on a home equity loan, you can lose your
home
What does the term "convenience user" mean as it pertains to credit?
Somebody who pays it off when the bill comes in; For convenience so that they don't
have to carry cash
Experts suggest that the debt payments-to-income ratio should be a maximum of
28:36 (20% of less)
How do you calculate the debt-to-equity ratio? What loans are not to be included?
Total liabilities/Net worth = Debt-to-equity ratio (Home Loans should not be
included) Should be less than 1.
FICO scores generally range from
350-850
What steps can you take if your credit application is denied?
Find out why you were denied (contact credit bureau); Work on making payments on
time/paying on stuff
What information does a credit report include?
# of accounts you have, whether you pay your bills on time, how much available
credit your are using, any collections against you, amount of out standing debt, age
of your accounts
,Name the three credit bureaus.
Equifax, Transunion, Experian
Name the only online source authorized to provide a free credit report each year
at your request
www.anualcreditreport.com
Information about a personal bankruptcy may be reported in your credit file for
10 years
The APR is the percentage cost of credit on a(n) ______ basis
annual
The minimum monthly payment on a credit card is the ___________amount you can
pay and remain a borrower in _______________.
smallest; good standing
If you double the monthly payment for a credit card, the loan will be paid off in
_________ than half time
less
What does the Consumer Credit Counseling Service do?
provide debt counseling services for families and individuals with serious financial
problems...sometimes charges a small fee to help pay administrative costs
Personal bankruptcy can be filed under which section(s) of the U.S. bankruptcy
code?
Chapter 7 & Chapter 13
Define comparison shopping:
process of considering alternative stores, brands and prices
Define impulse shopping:
involves unplanned purchasing, which can result in financial problems
, What is unit pricing?
Unit Pricing = Standard unit of measurement.
Allows you to COMPARE products.
Coupons and rebates
More store convenience → higher prices
Ready-to-use products → higher prices
Large is not always the best buy - check unit prices
"Sale" prices not always a savings
Online sources can save time
created by the seller or manufacturer and has two forms: the full warranty and the
limited warranty
Express warranty
covers only certain aspects of the product, such as parts, or requires the buyer to
incur part of the costs for shipping or repairs
Limited warranty
states that a defective product can be fixed or replaced during a reasonable
amount of time
Full warranty
covers a products intended use or other basic understandings that are not in
writing
Implied warranty
List disadvantages of a car lease
- No ownership interest
- You must meet
- May requirements additional costs may be incurred for extra mileage, certain
repairs, turning the car in early, or even a move to another state
price the dealership pays for the car
*check invoice prices at consumerreports.org and edmunds.com
