FINANCIAL LITERACY UNIT 4 TEST REVIEW
BULLINGER
1. Define and explain the advantages of debit cards.
2. What is a personal identification number?
3. Explain the Consumer Liability provisions outlined by the FTC with regards to debit cards and checking
accounts.
4. What does it mean to overdraft with regards to your checking account?
5. What is a check register? When would check registers be useful?
6. Define Credit
7. Define ‘Line of Credit’
8. Identify and explain the 5 ‘C’s’ of Creditworthiness.
9. What are the differences between Open-end credit and Close-end credit?
10. List 3 advantages and 3 disadvantages of using credit cards.
11. With regards to credit cards, what is interest?
12. What is a Schumer Box?
13. Explain the process of receiving a credit card*
14. What is a credit report?
15. What percentage of available credit should a consumer use?
16. How can you harm your credit (list 5 examples)?
17. Explain bankruptcy
18. What is the difference between secured debt and unsecured debt?
19. Explain Chapter 13 and Chapter 7 Bankruptcy.
20. What are the 3 main credit reporting agencies?
21. What are the components of the Fair Credit Reporting Act of 1971?
22. What is a Credit Score? Explain what a good credit score is, and what a sub-prime credit score is.
23. Explain and list the 5 categories with regards to how your Credit Score is determined.
24. A spending plan is also referred to as a ____________.
25. Explain the difference between fixed and variable expenses.
26. List 5 examples of fixed expenses, and 5 examples of variable expenses.
27. If I have more income than expenses, then I have a __________________.
28. With regards to a checking account, what is a balance. What is a balance with regards to credit
cards?
29. Explain the securitization food chain with regards to collateralized debt obligations.
30. Explain the role that AIG played with regards to the economic crisis of 2008.
31. Prepare a monthly and yearly budget for Mel Gibson using the following information:
Income:
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Salary: $3200/month
Interest: $20/month
Expenses:
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Rent: $900/month
Electricity: $60/month
Nat Gas: $50/month
Cable/Internet: $100/month
Groceries: $295/month
Renter’s Insurance: $15/month
Car Payment: $150/month
Auto Insurance: $80/month
Clothing: $60/month
Entertainment: $350/month
Investment Fund: $80/month
Gasoline: $200/month
Health Insurance: $145/month
Emergency Money: $200/month