University of Phoenix Faculty Material
Objective 2.1 Secured and unsecured debt
Which of the following is considered unsecured debt?
a. A mortgage
b. A car loan
c. A 401k loan
d. Credit-card debt
If you have applied for your first credit card and been denied, what is the best thing to do? a. Call up the card company and ask if you can be approved if you agree to a higher interest rate. b. Apply for a secured credit card
c. Add money from a cash loan to your checking account so it appears you have more funds available. d. Have someone cosign for a credit card for you.
Objective 2.2 Paying off and avoiding credit card debt
When you have serious credit card debt, where is the best place to seek help? a. From a debt consolidation company
b. From an independent consumer credit counseling agency, such as AICCCA or the National Foundation for Credit Counseling c. From a credit deferral service
d. From a private loan organization, such as a bank or credit union.
When you keep getting calls from a credit-card company about a bill you do not remember charging, what is the first thing you should do? a. Pay it off in full.
b. Verify the debt.
c. Refuse to pay the debt since you do not have a personal record of it. d. Change your phone number.
What is the rule of thumb about using money in a savings account to pay off a credit card balance? a. Use savings when your credit card balance is over $5,000
b. Use savings when your savings balance is over $5,000
c. Use savings when your credit card interest rate is more than 4% higher than your savings account interest d. Use savings when your savings account interest rate is 1% higher than your credit card interest rate
Objective 2.3 (A) Credit reports and scores
Which of the following is considered a very good credit score? a. 500-559
Which of the following is NOT a credit reporting agency?
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