Unit 8 Test - Credit Cards and Shopping Online

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1. Ivan is excited about his first credit card and starts listing the benefits of having a credit card. Which would be a benefit Ivan might list?
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1 point

may spend more than you earn

impulse buying is more likely

establish a consumer’s credit rating

credit problems can lead to higher interest rates

2. Which is a cost (disadvantage) of using a credit card?
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encourage overspending

simplify recordkeeping

limits liability for consumer

can take advantage of sales

3. Harold has just received his first credit card but is cautious in using it because of the associated costs. Which is a cost that might make Harold cautious in using the card?
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1 point

can use goods while paying for them

available for emergency situations

don’t have to carry around large sums of money

danger of credit card fraud and identity theft

4. Karen has an established credit history and always uses her credit card when traveling because of the increased credit and benefits she receives. She charges a lot of big-ticket items and uses her card several times a day. What type of card does Karen most likely have?
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1 point

affinity card

30-day card

co-branded card

prestige-status card

5. The period of time in which no interest is charged on new purchases is known as the _____.
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1 point

wait period

grace period

retail period

purchase period

6. Kyle has a rewards card and is proud of the rewards and store discounts he gets, and believes his card is much better than other cards. Why might Kyle’s card not be as good as he believes?
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1 point

He can’t use the card at all stores.

The rewards have too many restrictions.

Rewards most often expire at the end of each month.

He may be paying a higher interest rate or annual fee.

7. Credit card companies can change the terms of a credit card but have to provide credit card holders with _____.
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15 days notice in writing of the increase

30 days notice in writing of the increase

60 days notice in writing of the increase

90 days notice in writing of the increase

8. What law requires that all information about credit card fees be disclosed?
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1 point

Credit Relief Act

Credit Lending Law

Truth in Lending Act

Consumer Protection Act

9. Experts recommend that it’s best to keep credit card debt payments at _____ or less of your monthly take-home pay.
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1 point

10%

20%

25%

30%

10. Anna loves shopping online and says it has many advantages. Which is one advantage Anna might say is an advantage of shopping online?
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1 point

compare selection and prices

encourages impulse buying

lack of individual customer service

must add cost of shipping and handling

11. Sam prefers to shop in person rather than online because of the disadvantages of online shopping. Which is a disadvantage that may cause Sam to prefer to shop in person?
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1 point

can’t inspect items before buying

place orders without leaving home

no aggressive salespeople or crowds

find products that aren’t available locally

12. Which is a guideline when making payments for online shopping?
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1 point

pay by credit card whenever possible

pay be debit card whenever possible

never use an escrow service for payment

allow the website to save your credit card numbers

13. Late payments on car loans never affect credit card accounts.
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1 point

True

False

14. If you do not pay off the credit card balance each month, you will also pay interest.
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1 point

True

False

15. Goods and services purchased with a credit card will cost more than they would have if you had paid cash for them if you don’t pay off the balance each month.
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1 point

True

False

16. The initial rate you receive on a credit card will never increase.
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1 point

True

False

17. Interest rates are usually expressed as a percentage known as the Annual Percentage Rate or APR.
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1 point

True

False

18. Credit cards provide all consumers with the same rate of interest for a particular credit card.

1 point

True

False

19. Fees that credit card companies may charge include late fees, cash advance fees, fees for transferring another credit card balance, and fees for going over your credit limit.

1 point

True

False

20. If you make only the minimum payment on a credit card, you will pay the same amount as if you paid the balance in full each month.

1 point

True

False

21. One of the biggest disadvantages to online shopping is that you often don’t know who you’re dealing with.

1 point

True

False

22. Making more than the minimum monthly payment on credit cards is never a good idea.

1 point

True

False

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