Chapter 16 test

______ is a line of credit granted from one business to another for a short period of time to purchase its goods and services.

trade credit

Money lenders and credit card companies are required by the federal ______ Act to state the APR of loans when they advertise a rate.

truth and lending

______ credit is credit granted based on a signed credit agreement alone.

unsecured

A written set of guidelines used by an organization to determine how many and which customers will be approved for credit is a ______.

credit policy

A ______ is a record of credit history and financial behavior for a business or individual.

credit report

A ______ is a numerical measure of a loan applicant's creditworthiness at a particular point in time.

credit score

The party extending credit is known as the ______.

creditor

______ is the continues and regular patronage of a business even when there are other places to purchase the same or similar products.

customer loyalty

A(n) _____ is the total amount paid by a borrower to a lender for the use of credit.

finance charge

A(n) ______ loan is a loan for a specific amount of money that is repaid with interest in regular installments.

installment

A(n) ______ loan is a loan for a specific amount of money that is repaid with interest in regular payments.

installment

The ______ represents the cost of a loan and is expressed as a percent of the amount borrowed.

interest rate

A(n) ______ is a schedule that shows the amount of interest and principal for each payment so a loan can be repaid within a specific period of time.

open-end credit

______ is an agreement that allows the borrower to use a specific amount of credit over a period of time.

open-end credit

A ______ credit card is one that can only be used only in the stores of the company that issued it.

proprietary

A(n) _____ credit account does not automatically close when the balance is paid off.

revolving account

Credit loans that require collateral are known as ______ credit.

secured

______ is a formula based on the principal, interest rate, and length of time of a loan.

simple interest

Criteria used to evaluate the creditworthiness of consumer credit applicants, which includes character, capacity, and capital, are called the ______.

3 C's of credit

Criteria lenders use to evaluate the creditworthiness of businesses, including cash flow, capacity, collateral, and conditions, are called the _____.

5 C's of banking

Credit granted to individual consumers by a retail business is ______ credit.

consumer

______ credit is credit granted to individual consumers by a retail business.

consumer

Credit granted to a business by a financial institution or another company is _____ credit.

business

______ credit is credit granted to a business by a financial institution or another company.

business

A loan for a specific amount that must be repaid with interest by a specified date or according to a specified schedule is called ______.

closed-end credit