The interest or money (including all fees) that is charged a borrower for the use of credit is the ____.

• Finance Charge

• Collateral

• Capital

• Principal

The original amount borrowed on a loan is known as the ____.

• Finance Charge

• Collateral

• Captial

• Principal

An all-purpose credit card, such as Visa, MasterCard, and Discover, is an example of which type of credit?

• 30-day credit agreement

• Open/Revolving credit

• Closed-end credit

• Service credit

Which of the following is NOT an advantage of using credit?

• It only allows you to shop at one store with it

• It is convenient

• It is safer than carrying around large sums of money

• It is useful in emergency situations

A loan for which the borrower pledges property to ensure repayment is a(n) ____

• Installment purchase

• Prorated loan

• Secured loan

• Contracted loan

A mother and daughter have a joint credit card. The daughter goes to college and buys $1500 worth of books. Who is responsible for paying the debt?

• The daughter because she is the one who charged the books.

• Neither of them

• The mother because it is always the parent’s responsibility.

• Both the daughter and the mother because both of their names are on the account.

Property pledged to assure repayment of

a loan is called ____.

• Capital

• Character

• Capacity

• Collateral

The debtor is ____.

• The person who borrows the money

• the entity to whom you owe money to

• your accumulated assets

• assets pledged to assure repayment of a loan

The creditor is ____.

• The person who borrows the money

• The entity or person to whom you owe money to

• Your accumulated assets

• Assets pledged to assure repayment of a loan

Which of the following is an example of a long-term debt?

• A term life insurance policy

• A student loan

• A debit card purchase

• A money market account