Deca 55-63

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An example of identity theft is when an individual

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uses another person’s information to open an account.

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It is generally a good idea to borrow money and repay the amount borrowed with future income when a person needs to buy a car to get a much better paying job.

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a person needs to buy a car to get a much better paying job.

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If a person is behind on his debt payments and goes to a responsible credit counseling service, what help is likely to be offered?

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They can work with those who loaned him money to set up a realistic payment schedule.

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Who is likely to pay the lowest finance charge: Scott, who borrowed $6,000 for an overseas vacation, or Eric, who borrowed $6,000 to buy a truck?

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Eric will pay less because the truck is collateral for the loan.

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An arrangement to receive cash, goods or services now and pay for them in the future is called

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credit.

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The rate imposed by the lender for the borrower to pay on a loan is known as

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annual percentage rate (APR)

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The possibility that a borrower fails to repay a loan on time and will never be able to repay the loan is known as

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credit risk.

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When applying for a loan, borrowers will probably need to provide information regarding their

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assets.

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A person purchases $2,500 of furniture from XYZ Department Store and decides to use the store’s plan with 12 equal payments over the next year. This is an example of

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an installment plan.