UGBA 196 Midterm Question and answers correctly solved 2023/2024

UGBA 196 Midterm Question and answers correctly solved 2023/2024 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