Chapter 10 Resource Management

credit bureau

A company that collects information about consumers' credit history and sells it to lenders is a ____.

bankruptcy

A legal process in which people who cannot pay their debts surrender most of their property is called ____.

secured loan

A loan that is backed by something of value pledged to insure payment is a ____.

credit rating

A measure of your creditworthiness is your ____.

regular charge account

I-chen Lee has a charge account at a department store. The account allows her to make charges throughout the month. She will not pay any interest because she must pay the balance in full by the 15th day of the next month. What type of account does I-chen Lee have?

Get a Job Pay you bills on time Open a Savings

If you have no credit history and are trying to establish your creditworthiness you can...

pawnbroker

If you want to get cash for personal property such as jewelry or a TV, then you need to see a ____.

revolving charge account

Mazher has an account that allows him to charge up to $5,000. Under the credit agreement, he is not required to pay the balance in full. Mazher often chooses to make the minimum payment, carrying the remaining balance forward to the next month. What type of account does Mazher have?

Fair Debt Collections Practices Act

Orestes was hospitalized for two weeks. During this time he was unable to work. In addition to his lost income, he owes over $12,000 as his part of his medical expenses that were not covered by his health insurance. As a result, he was not able to pay many of his credit cards and other loans on time. Debt collection agencies begin calling him regularly. One debt collector even followed him to a grocery store and embarrassed him in front of other people. What law is intended to prevent debt collection agencies from using such abusive practices?

credit limit

The maximum amount you are allowed to charge on your account is the ____.

grace period

The time between the billing date and the payment due date, when no interest is charged, is the ____.

Fair Credit Reporting Act

Troy was recently denied credit at a local furniture store. A week later he received a letter from the furniture store identifying the credit bureau that supplied the information used in making its lending decision. At this point, Troy has 30 days to request a free copy of his credit report from that credit bureau. What law created this process giving Troy and other consumers a way to check their credit reports when they are denied credit?

Previous balance

What information should be included on your monthly credit card statement?

MasterCard VISA American Express

Which of the following are sources of credit cards?

character

While attending college, Caleb had a full-time job. During those years, he lived at the same address and always paid his rent and utilities on time. Lenders would look at his lifestyle and find him to be responsible. They would grant him credit based on Caleb's ____.

False

true or false A lender will always limit your credit because they are trying to protect you from financial difficulties.

True

true or false An unsecured loan is not backed by collateral, and usually only requires a signature.

False

true or false Bouncing a check and making payments on time are BOTH ways that can hurt your credit.

False

true or false Consumers should take every credit card that is offered to them so they will have a variety of choices.

True

true or false Credit cards are usually one of the most expensive forms of borrowing.

True

true or false Creditors must send statements on ALL credit accounts which have debit and credit balances.

True

true or false If you believe a product you bought with a credit card is of inferior quality, you must try to settle the problem with the merchant who sold you the merchandise.

False

true or false Interest rates charged for unsecured loans are generally lower than on secured loans.

False

true or false It is fair to assume that the credit bureau will take care of the problem for you.

False

true or false On a revolving charge account, the more slowly you reduce the balance, the less interest you will pay overall.

true

true or false The Equal Credit Opportunity Act makes it illegal to refuse to grant credit on the basis of race, color, religion, national origin, sex, marital status, or age.

true

true or false The Fair Credit Billing Act helps consumers correct credit card billing mistakes.

true

true or false The Fair Credit Reporting Act of 1971 gave consumers a way to check their credit reports.

False

true or false The three factors that lenders use to judge creditworthiness are character, capital, collateral.