UGBA 196 Midterm
What does your FICO score represent? - correct answer delinquency and default rate of a large number
of people with similar credit history
What factors determine your FICO score? (5) - correct answer on time bills, debt to credit ratio, length of
credit history, new accounts/applications for credit, mix of credit cards and loans
Credit Card Act - correct answer ⁃ no interest rate increase for 1 year unless introductory rate has come
to an end or you are 60+ days late on a payment
⁃ card holder must be notified 45 days in advance of rate change or you can close the account/pay off
balance at old interest rates
⁃ 60+ days late in making minimum payment, you can be charged interest default rate. on time
payments for 6 months restores original rate
⁃ interest rate increases can only be applied to new charges
⁃ promotional rate periods must be for at least 6 months
⁃ overdraft fees only allowed if cardholder agrees to them
⁃ credit holds cannot result in overdraft unless executed
⁃ statements must show how many months to pay off if minimum payment is made as well as how much
to pay each month to be debt free in 36 months
⁃ fees may not exceed 25% of credit limit during first year
⁃ no legal limit or cap on interest rates on outstanding balances
⁃ grace period: statements mailed 21 days before payment due date, no charges prio
grace period - correct answer statements mailed 21 days before payment due date, no charges prior to
this day
Where are card payments in excess of minimum applied? - correct answer balance with highest interest
rate
, credit card warnings - correct answer late payment, minimum payment, 30 day warning of account
closure
credit card promotional rates - correct answer must last at least 6 months
first year of credit card fees - correct answer fees may not exceed 25% of credit limit
credit cards/under 21 - correct answer need cosigner and permission to increase credit limit
credit card payments - correct answer same day every month 5pm, no fees for online/phone
interest default rate (percent, what causes it/stops it) - correct answer 28-35%, 60+ days late in making
minimum payment, on time payments for 6 months stops it
overdraft fees (cost, interest, rule) - correct answer fee as high as $39, you can be charged interest on
these fees, only allowed if cardholder agrees to them
credit card statement rules - correct answer show how many months to pay off balance, how much to
pay to be debt free in 3 years, toll free credit counseling
What happens when you make a late payment? - correct answer interest charges will increase if not
paid, fees up to $39
Why do people have prenuptial agreements nowadays? - correct answer people marry later so they want
to protect their assets upon death
How long before a marriage should you establish a prenuptial agreement? - correct answer 60-90 days
What percent of marriages have prenuptial agreements? - correct answer 50%
What does your FICO score represent? - correct answer delinquency and default rate of a large number
of people with similar credit history
What factors determine your FICO score? (5) - correct answer on time bills, debt to credit ratio, length of
credit history, new accounts/applications for credit, mix of credit cards and loans
Credit Card Act - correct answer ⁃ no interest rate increase for 1 year unless introductory rate has come
to an end or you are 60+ days late on a payment
⁃ card holder must be notified 45 days in advance of rate change or you can close the account/pay off
balance at old interest rates
⁃ 60+ days late in making minimum payment, you can be charged interest default rate. on time
payments for 6 months restores original rate
⁃ interest rate increases can only be applied to new charges
⁃ promotional rate periods must be for at least 6 months
⁃ overdraft fees only allowed if cardholder agrees to them
⁃ credit holds cannot result in overdraft unless executed
⁃ statements must show how many months to pay off if minimum payment is made as well as how much
to pay each month to be debt free in 36 months
⁃ fees may not exceed 25% of credit limit during first year
⁃ no legal limit or cap on interest rates on outstanding balances
⁃ grace period: statements mailed 21 days before payment due date, no charges prio
grace period - correct answer statements mailed 21 days before payment due date, no charges prior to
this day
Where are card payments in excess of minimum applied? - correct answer balance with highest interest
rate
, credit card warnings - correct answer late payment, minimum payment, 30 day warning of account
closure
credit card promotional rates - correct answer must last at least 6 months
first year of credit card fees - correct answer fees may not exceed 25% of credit limit
credit cards/under 21 - correct answer need cosigner and permission to increase credit limit
credit card payments - correct answer same day every month 5pm, no fees for online/phone
interest default rate (percent, what causes it/stops it) - correct answer 28-35%, 60+ days late in making
minimum payment, on time payments for 6 months stops it
overdraft fees (cost, interest, rule) - correct answer fee as high as $39, you can be charged interest on
these fees, only allowed if cardholder agrees to them
credit card statement rules - correct answer show how many months to pay off balance, how much to
pay to be debt free in 3 years, toll free credit counseling
What happens when you make a late payment? - correct answer interest charges will increase if not
paid, fees up to $39
Why do people have prenuptial agreements nowadays? - correct answer people marry later so they want
to protect their assets upon death
How long before a marriage should you establish a prenuptial agreement? - correct answer 60-90 days
What percent of marriages have prenuptial agreements? - correct answer 50%
