Debt

A long-term rental agreement on a car; a form of secured long-term debt.

• loan

• lease

The Federal Trade Commission (FTC) is one of many U.S. federal agencies that regulate the consumer credit system and enforce the laws related to it.

• True

• False

What is paycheck garnishment?

• A court-ordered attachment that allows a lender to take monies owed directly from a borrower's paycheck

• Process of taking something back for failure to make payments

• Process by which the holder of a mortgage sells the property of a homeowner who has fallen behind on payments

• A legal procedure for dealing with debt problems of individuals and businesses

Teens are a huge target of credit card companies today.

• True

• False

Which of the following statements is false?

• Prior to the FCRA, consumers were unable to challenge errors in their credit reports.

• Under FCRA, consumers are allowed to receive one free credit report every five years.

• The U.S. Congress enacted the Fair Credit Reporting Act to address concerns over consumer credit report accuracy, privacy and fairness.

• Under FCRA, creditors must notify consumers if they deny credit based on a credit report file, and they must also tell the consumer which of the three credit bureaus provided the report.

Which of the following best summarizes how the use of a credit card for purchases instead of cash can change one’s spending behavior?

• Spending behavior does not matter as long as you pay off the credit card balance each month.

• Studies show that there is no change in spending behavior whether a person uses cash or credit.

• People typically spend less when they know that they are earning creditcard ʺrewards.ʺ

• Studies show that consumers typically spend more when using credit as opposed to cash purchase.

It is okay to use a credit card if you pay it off every month.

• True

• False

A decrease or loss in value.

• Depreciation

• Inflation

Time frame that a loan agreement is in force, and before or at the end of which the loan should either be repaid or renegotiated.

• Loan term

• Loan financing

A detailed report of an individual's credit history.

• Credit report

• Cash flow statement