Financial Responsibility Answers

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1
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Veronique and Lily each bought a piece of luggage that had the same price in different stores. The table below shows how they will pay for the item. Payment for PurchasesNamePayment TypePayment Amount (Including Finance Charges)Number of Months to Pay for ItemVeroniqueStore financed$2510LilyCredit card$357Who made the better financial decision and why?

A
Veronique because her payments are lower.
B
Veronique because her final cost, including finance charges, is less than Lily’s.
C
Lily because she is paying off her purchase sooner.
D
Lily because her final cost, including finance charges, is less than Veronique’s.
2
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Barbara has $70.00 in her pocket and a $20 gift card. Which purchase will she be able to make without having to use her credit card?

A
a portable radio for $65.95 and speakers for $29.99
B
five books for $18.95 each
C
headphones for $25.99 and eight CDs for 8.99 each
D
six puzzles for $11.99 each and a board game for $15.89
3

Omar is having trouble paying his rent and making minimum payments on his student loan and credit cards. What should Omar consider doing to improve his situation?

A
Omar should apply for a personal loan.
B
Omar should get budgeting advice from a consumer credit counselor.
C
Omar should apply for another credit card to buy food with.
D
Omar should make less than the minimum payments each month.
4

Which is a short-term consequence of making a late payment on your bill?

A
It will be harder to buy a house because it affects your credit history.
B
There will be a late fee added to the bill.
C
It will be harder to secure a new loan at a low rate.
D
The bank will charge a fee for having a negative balance.
5

Which statement describes a disadvantage of Marnie paying a bill by telephone with a credit card or a debit card?

A
Marnie will not have to find a stamp and a mailbox.
B
Marnie will have to share her card account information.
C
Marnie’s bill is paid immediately.
D
Marnie may be eligible for a discount.
7

Anastasia makes a good salary but wants to be sure she has good credit so she can buy a condominium when she has saved enough money for a down payment on a mortgage. What is the best thing she can do to improve her creditworthiness?

A
She should take out more debt to improve her credit score.
B
She should take out more debt to improve her credit score.
C
She should pay down her student loan and credit card debt.
D
She should pay down her student loan and credit card debt.
E
She should apply for more credit cards to improve her credit history.
F
She should apply for more credit cards to improve her credit history.
G
She should get a second job to make more money.
H
She should get a second job to make more money.
8

Which is a possible benefit of having a good credit history?

A
getting a high interest rate on a credit card offer
B
obtaining a low interest rate on a loan
C
obtaining a savings account
D
having a paycheck garnished
9

Lakesha does not have enough in her bank account to use a debit card for the purchase of a bike she needs to get to work. She has to decide whether to use a credit card or to finance the bike through the store. Which questions should Lakesha answer before making her decision? Check all that apply.

A
Will this cause my bank account to have a negative balance?
B
What is the difference in the finance charges for the two choices?
C
How much will the bike cost when adding the finance charges to the price?
D
Should I talk to a consumer credit counseling service?
E
Can I pay at least the minimum payment each month?
F
Will I be able to make the payments and avoid late fees?
10

Shondra is thinking of making payments for her laptop by setting up automatic withdrawals with the store. What must Shondra consider before she decides to pay with automatic withdrawals?

A
Shondra should be sure she will remember to call the store each month to make the payment.
B
Shondra should check her credit history to be sure she has a good credit score.
C
Shondra should be sure she will have enough in her account to be able to make the monthly payments.
D
Shondra should consult with a credit counseling service.

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