chapter 18 review
The Truth-in-Lending Law limits your liability to ____________________ for unauthorized credit card purchases made prior to notifying the card issuer.
$50
Simple interest =
P x R x T
A creditor is a business or individual who is willing and able to provide information about your creditworthiness.
false
A person's reputation for paying bills on time is known as collateral.
false
This regulation requires that you be told the cost of credit before signing an agreement.
truth-in-lending law of 1968
To make the computation of interest easier, a year is often considered as
360 days
Which of the following is an example of a bank card?
MasterCard
The legal process of reducing or eliminating an amount owed is called
bankruptcy
The Fair Credit ____ Act allows you to withhold payment of any balance due on defective merchandise.
billing
A(n) _______ charge account requires a customer to make payments of a fixed amount over several months.
budget
A person's ability to pay a debt when it is due is called ______
capacity
Which of the following will NOT help you to establish a good record of creditworthiness?
changing jobs frequently
_______ of a note is responsible for payment of the note if you do not pay as promised.
cosigner
Which of the following is NOT one of the "three Cs of credit"?
creativity
_______ is the privilege of using someone else's money for a period of time.
credit
A company that gathers information about credit users and sells it to businesses that offer credit is called a
credit bureau
A maximum amount you are allowed to owe at one time on your credit account is called the
credit limit
A company that attempts to obtain money that is past due is called a
debt collection agency
Anyone who buys on credit is called a(n
debtor
A payment of part of the purchase price of a product or service is a(n) _____ payment; it usually made at the time of the purchase.
down
This regulation requires credit bureaus to delete any information dealing with a personal bankruptcy that is more than ten years old.
fair credit reporting act
People who use affinity cards are usually expected to pay the full balance each month.
false
The Consumer Credit Reporting Reform Act places the burden of proof for accurate credit information on you rather than the credit reporting agency
false
it is illegal for a state or local government to purchase goods on credit
false
_____ charge is the total dollar cost of credit including interest and all other charges.
finance
Which of the following is NOT a provision of the Equal Credit Opportunity Act?
it prevents creditors from looking into your creditworthiness
The date on which a loan must be paid is the___ date.
maturity
Which of the following is a disadvantage of using credit?
overbuying
People who need a small amount of money for a short time sometimes use ______ loans, a type of cash advance with extremely high interest rates.
payday
The amount of a loan is called the _____
principal
A written promise to repay based on a debtor's excellent credit history is a(n)
promissory note
This type of charge account requires the buyer to make full payment within a stated period.
regular charge account
Your credit ____ shows the debts you owe, how often you use credit, and whether you pay your debts on time.
report
If you cannot pay your bills, you should never
respond to an advertisement claiming to "erase bad credit—100% guaranteed."
If you charge a purchase at the time you buy the good or service, you are using _____ credit.
sales
Which of the following require disclosure of the APR
sales credit agreements and loan credit agreements
of account is a record of the credit transactions completed during the billing period.
statement
This type of credit occurs when a company receives goods from a supplier and pays for them later.
trade credit
An installment loan is one in which you agree to make monthly payments in specific amounts over a period of time.
true
If you borrowed $100 for one year and paid $110 at maturity, the interest rate you paid would be 10 percent.
true
The Federal Trade Commission reports that credit card fraud is a major problem.
true
The cost of using someone else's money is called interest.
true
The date on which a loan must be repaid is the maturity date.
true
A statement will report all of the following information EXCEPT
whether the item was purchased on sale
