managing your personal finances
the total amount that remains due on a loan
balance due
the person who borrows money or uses it is the creditor lender borrower merchant
borrower
a preestablished amount that can be borrowed
capital
property you possess that is worth more than your debts is called collateral capital principle interest
capital
at which of the following will you probably get the lowest rate of interest for a consumer loan? commercial bank finance company credit union pawnbroker
credit union
person to whom one owes money of goods
creditor
a line of credit is a pre-established amount that can be borrowed on demand, with collateral
false
a pawnbroker is an illegal business where loans are made on the value of merchandise that serves as collateral
false
credit unions charge higher rates of interest on loans than do banks or finance companies
false
drug stores, clothing stores, and pawnshops are all examples of retail stores
false
finance companies take less risk and charge lower interest rates than do credit unions
false
in a regular charge account, when you pay the balance in full, a finance charge is computed in the regular monthly payment
false
you generally are able to add onto a closed-end account, as long as payments are current
false
the interest or money that is charged a borrower for the use of credit is the finance charge collateral proration all of these
finance charge
the interest you pay for the use of credit
finance charge
small loan companies that charge high interest rates
finance companies
which of the following is not an example of service credit? office visits to a doctor dry cleaning services hairdresser services repair services
hairdresser services
which of the following is not an advantage of using credit? it allows you to shop only at one store it is convenient it is safer than carrying larges sums of cash it is useful in emergency situation
it allows you to shop at only one store
unlicensed lenders who charge illegal rate
loan sharks
the least amount you may pay under your credit agreement
minimum payment
credit that can be used again and again (as long as the balance owed does not exceed the limit) is called installment open end closed end contract
open end
a common source of cash loans is when property is pledged is private lenders pawnbrokers life insurance policies loan sharks
pawnbrokers
legal businesses that give loans based on the value of merchandise held as collateral
pawnbrokers
the amount borrowed is known as the credit interest capital principle
principle
department stores and variety stores are examples of this type of credit source
retail stores
a loan on which property is pledged to ensure payment
secured loan
laws that establish maximum interest rates
usury laws
a loan for which the borrower pledges property to ensure repayment is an installment purchase agreement a secured loan a prorated loan a contract
a secured loan
which of these is a form of open-end credit? amercian express car loan installment loan bank loan
american express
a revolving credit account is a type of closed-end credit
true
closed-end credit often requires a down payment and the item being purchased serves as collateral
true
credit unions make loans available to their members only
true
in the 1990's, overuse of credit cards resulted in record numbers of people declaring bankruptcy
true
it is important to establish a good credit record now so that you can get credit later, as needed
true
late fees for payments on credit cards can also result in higher interest rates
true
many large retail stores allow customers to use bank credit cards as well as store credit
true
one of the most common sources of cash loans is the private lender
true
service credit is available to almost everyone and most often does not carry finance charges but allows budget plans when needed
true
the annual percentage rate (APR) is the cost of credit, expressed as a yearly percentage
true
today, credit is abundant and difficult to avoid
true
use of credit can lead to overspending
true
using credit ties up future income and can put strain on a family budget
true
where no usury laws exist, finance companies charge as much interest as may be agreed upon
true
