Personal Finance Ch. 9

A legal state in which the courts excuse a debtor from repaying some or all debt. In return, the debtor must give up certain assets and possessions

bankruptcy

Credit cards that allow consumers to use credit at many places can be obtained through ____.

banks, credit unions, and credit card users

A consumer should check out his or her credit rating periodically to ____.

be sure the info on file is correct

A loan that must be repaid with finance charges by a certain date

closed-end credit

An arrangement that allows consumers to buy goods or services and pay for them later

credit

Allows consumers to make purchases or borrow money on a time-payment plan

credit card

A record of a person's credit history and financial behavior

credit report

Credit cards are used primarily to obtain cash loans.

false

Credit reporting agencies automatically send credit reports to consumers each month

false

Open-end credit is used for loans

false

The forced sale of a property

foreclosure

You can damage a good credit rating by ____.

ignoring bills you cant pay until the creditors take collection action

The Equal Credit Opportunity Act prohibits discrimination in the granting of credit on the basis of all except ____.

inability to repay

As the percentage rate of interest on a credit transaction increases, the finance charges ____.

increase

Allows the borrower to use a certain amount of money for an indefinite period of time

open-end credit

A loan that requires collateral

secured loan

If your credit card is lost or stolen, ____.

you are responsible for only $50 in charges per card

Which of the following is not an advantage of using credit?

the ease of spending money you dont have

A chief advantage of using credit is the opportunity to use goods and services while paying for them

true

According to the Equal Credit Opportunity Act, a person who is denied credit has the right to a written explanation of why credit was denied

true

Credit is more costly than using cash

true

You should never sign a credit contract without knowing the exact meaning of all of the terms it contains

true