Chapter 16-Credit In America

Question 0

Paying at a future date for the present use of goods and services or money

Answer 0

Credit

Question 1

One who lends money or the use of goods and services for payment at a later date

Answer 1

Creditor

Question 2

A pre-established amount that can be borrowed on demand

Answer 2

Line of credit

Question 3

Credit whereby you can add purchases up to a set credit limit

Answer 3

Open-ended credit

Question 4

A loan for a specific amount that must repaid in full, including finance charges, by a stated due date

Answer 4

Close-end credit

Question 5

Unlicensed lenders who charge illegally

Answer 5

Loan shark

Question 6

A service to customers that allows that person to charge now and not be billed in several months

Answer 6

Deferred billing

Question 7

The interest and fees you pay for the use of credit

Answer 7

Finance charges

Question 8

A charge that allows a person to have work performed and paying later

Answer 8

Service credit

Question 9

In some states, maximum interest rates are set by

Answer 9

Usury laws

Question 10

A legal business where loans are made based on the value of merchandise used as collateral

Answer 10

Pawnbroker

Question 11

Something of value that can be sold to pay a debt

Answer 11

Collateral

Question 12

The cost of credit expressed as a yearly percentage rate

Answer 12

Annual percentage rate

Question 13

The free period that allows you to avoid a finance charge if you pay in full before the due date

Answer 13

Grace period

Question 14

A loan which the goods purchased with the loan serve as

Answer 14

Collareral

Question 15

Money borrowed against credit card limit

Answer 15

Cash advance

Question 16

A Manufacturer-related company that makes loans through authorized representatives

Answer 16

Sale finance company

Question 17

Businesses that offer goods and services directly to consumers and include department stores, drugstores, and clothing stores

Answer 17

Retail stores

Question 18

Small loan companies that charge higher interest rates and take more risk

Answer 18

Consumer finance company

Question 19

Most disadvantages of credit can be eliminated by wise use of credit

Answer 19

True

Question 20

Department stores, drug stores, and finance companies are all examples of retail outlets

Answer 20

False

Question 21

Interest rates at a credit union are normally higher than at banks

Answer 21

False

Question 22

Where no usury laws exist, financial institutions may charge whatever rate of interest is agreed upon

Answer 22

True

Question 23

In an installment purchase agreement, the item you are purchasing will serve as collateral

Answer 23

Trie

Question 24

Affinity cards charge higher interest rates than regular bank credit cards

Answer 24

False

Question 25

Credit has helped the American economy grow at a healthy pace

Answer 25

True

Question 26

The Truth-in-Lending law requires all lenders to calculate APR the same way

Answer 26

True

Question 27

Handling charges and service charges are other names for service charge

Answer 27

True

Question 28

Credit cards such as VISA and MasterCard are examples of

Answer 28

Revolving credit agreement

Question 29

What is an example of service credit

Answer 29

Telephone bill

Question 30

What is not true about an installment plan

Answer 30

New purchases may be added on

Question 31

General Motors Acceptance Corporation is an example of

Answer 31

Sales finance company