Banking & Finance- Ch 25

Which term refers to a person who lends money or provides credit?

• debtor

• consumer

• creditor

• borrower

Which term refers to a loan fee, or percentage of the amount borrowed?

• interest rate

• interest base

• consumer credit

• creditor rate

Which term could be used to refer to the use of credit by a manufacturer to finance the development of an energy-efficient truck?

• commercial credit

• consumer credit

• military spending

• government spending

Which is a factor that contributes to a good credit rating?

• avoiding the use of credit

• reaching your credit limit

• using credit in an emergency

• paying bills on time

which is NOT an advantage of using credit?

• traveling without large amount of cash

• handling emergency financial needs

• committing future income to debt repayment

• contributing to the growth of the economy

Which might cause your credit rating to be lowered?

• using credit in an emergency

• paying late or missed payments

• using savings instead of credit

• putting off purchases for awhile

Which is something you should consider before using credit to finance a major purchase?

• what is the difference between commercial and consumer credit?

• what are the costs of using credit to make this purchase?

• Will the purchase contribute to economic growth?

• Have you recently used credit to make other purchases?

Which might be obtained from a department store?

• a charge account

• a debit card

• a travel and entertainment card

• a credit union account

Which depends on the degree of risk a creditor takes in lending money or selling on credit?

• whether the loan is short-term or long-term

• whether the borrower makes full or partial payment

• the use of a credit card or charge account

• the cost of the credit to the borrower

Which is NOT a way that credit card companies make money?

• late fees and penalties

• annual fees

• interest

• sales taxes