7.2 Credit: Types and Sources Vocabulary Test

What does open-end credit let you do?

• enables a borrower to use credit up to a stated limit

• provide a service for which you can pay later

• gain easier access at an ATM or bank

The APR is the cost of credit expressed as a_______percentage.

• monthly

• yearly

• daily

The grace period is a timeframe within you may what?

• receive awards by creditors

• take some time off of credit

• your current balance in full and incur no finance charge.

Does closed-end credit require you to pay all finance charges by a specified due date?

• yes

• no

• depends on the amount of finance charge

Service credit involves providing a service for which you will pay____.

• later

• never

• in that moment

A finance company is an organization that makes low-risk consumer loans.

• true

• false

A usury law is a state law that sets a maximum interest rate that may be charged for consumer loans.

• false

• true

Can you trust a loan shark?

• definitely

• never

• depends on what they charge

What is a pawnbroker?

• an unlicensed lender who chargers illegally high interest rates

• a legal business that makes high-interest loans based on the value of personal possessions pledged as collateral?

• people who are turned down by banks and credit unions

What can you purchase with Close-End Credit?

• shoes

• hamburger

• house

• furniture