Chapter Six

The following are all advantages of using credit EXCEPT _____.

You might be tempted to buy more than you can afford.

The _____ is the cost of credit on a yearly basis, expressed as a percentage.

annual percentage rate

The five C's of credit include all the following EXCEPT _______.

cooperation

_____ is an arrangement to receive cash, goods, or services now and pay for them in the future.

credit

_______ are required to follow reasonable procedures to make sure that the information in their files is correct.

credit bureaus

Many lenders believe that you have a higher stake in repaying a loan if you make a _____.

large down payment

A _____ is the maximum amount of money a creditor will allow a credit user to borrow.

line of credit

Which of the following calculations will help you figure out your debt payments-to- income ratio?

monthly debt payments ÷ monthly net income

The calculation for simple interest is _____ × interest rate × amount of time.

principal

A finance charge is _____.

the total dollar amount you pay to use credit