UGBA 135 Final EXAM NEWEST VERSION WITH COMPLETE QUESTIONS AND CORRECT DETAILED SOLUTIONS LATEST UPDATED VERSION JUST RELEASED

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UGBA 135 Final EXAM NEWEST VERSION WITH
COMPLETE QUESTIONS AND CORRECT DETAILED
SOLUTIONS LATEST UPDATED VERSION JUST RELEASED


Question: Where can the lender not take out money from if you don't pay them back? -

CORRECT ANSWER✔✔Your bank account or your assets (excepting if your credit card is the

same bank as your checking or savings account)




Question: What is a credit hold? - CORRECT ANSWER✔✔When a hotel, car dealer, etc. put

extra charges on your card to cover and damages or other purchases you make, and is released

in a few days after




Question: What is the average credit card monthly balance of an American household? -

CORRECT ANSWER✔✔Over $9,000




Question: Why do merchants like debit cards over credit cards? - CORRECT ANSWER✔✔The

interchange fees for debit cards are about one-third of the fees for credit cards

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Question: Why do banks like debit cards over credit cards? - CORRECT ANSWER✔✔The money

is in the account so they take no risk on you




Question: What is the difference in fraud reimbursements between credit and debit? -

CORRECT ANSWER✔✔Credit is reimbursed in a few days; Debit can take up to 2 - 3 months




Question: What is a charge card? - CORRECT ANSWER✔✔A retailer card that can only be used

at that store, often coming with discounts but high rates of interest




Question: Are prepaid cards limited by most credit card restrictions? - CORRECT

ANSWER✔✔No




Question: What is a payday loan? - CORRECT ANSWER✔✔A high interest short term cash loan

intended to be repaid by future paychecks

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Question: What is installment debt? - CORRECT ANSWER✔✔Money borrowed to purchase

large items, paying for them over time (usually monthly - earlier payments pay off mostly

interest, later payments pay off mostly principal)




Question: What is a deferred interest plan? - CORRECT ANSWER✔✔A plan that enables

consumer to purchase big-ticket items paying no or low interest over a promotional period




Question: What are downsides of a deferred interest plan? - CORRECT ANSWER✔✔If you don't

pay off the entire balance by the end of the period, or are late 60 days in your payments, you

may be retroactively charged interest on the balance during the promotion




Question: What are expiration dates for gift cards? - CORRECT ANSWER✔✔Either eliminated or

no fewer than five years




Question: What rates is your credit card rate of interest composed of? Which is based on your

credit score? - CORRECT ANSWER✔✔The go-to rate and the variable rate - the go-to rate is

based on your credit score

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Question: What is the default rate? - CORRECT ANSWER✔✔The accelerated rate of interest

(28% - 35%) charged as a penalty if:




The issuer did not receive minimum payment by due date




Payment is not honored by the bank




Question: What is universal default? - CORRECT ANSWER✔✔The ability of a lender to change

terms of loan upon learning the customer has defaulted/missed a loan payment to another

lender




Question: When should credit card payments be made? - CORRECT ANSWER✔✔Online - 2 days

prior


Mail - 5 days prior




Question: Should mail be received or postmarked by the due date? - CORRECT

ANSWER✔✔Received