Chapter 7 Quiz- Credit Cards and Consumer Loans

Credit card costs can include

-annual fees. -interest. -transaction fees. Correct! all of these.

Mary Beth has just applied for a credit card that offers a 6 percent interest rate for 12 months. At the end of 12 months, the interest rate will be "prime plus 9 percent." Which of the following characteristics does this card have?

Both variable interest rates and teaser rates

Which of the following is an example of an unsecured debt?

Signature loan

If you are likely to pay your balance in full each month, select a credit card with

a grace period and no annual fee.

The last day of the month on which any transactions are reported on the credit statement is called the

billing date.

If finance charges are not assessed on new credit card transactions during the period between the posting date and the due date, this period is called the ____ period.

grace

When the declining-balance method is used to calculate interest on an installment loan, the periodic interest rate is applied to the

outstanding balance each period.

"Gold," "silver," or "platinum" cards are all examples of ____ cards.

prestige

Mike Irwin recently purchased a microwave oven at Sears and charged it on his Sears account. This is an example of a

purchase loan and sales credit.

A requirement of the federal Truth in Lending Act (TIL) requires that all installment loan lenders disclose to credit applicants

the interest rate (as an APR) and the finance charge (in dollars).