CM 4.4 Activity Check for Understanding

The charge for setting up a loan is...

• annual fee

• credit fee

• origination fee

• grace fee

When a credit card company charges for the use of their credit card it is a(n) ____________.

• annual fee

• credit fee

• origination fee

• grace fee

Finance charge is _______________ cost of using credit card including interest and fees.

• the total

• half of

• twice the

• not a

If a credit card has a 20 day grace period, you have 20 days before the lender ________________

• charges interest on the money borrowed

• charges interest on the interest

• sends you to collections

• raises the interest rate

The purpose of an introductory rate is to ______________.

• reward you for being a loyal customer

• scare you away from signing up for credit with them

• entice you to sign up for credit with them

• help you pay off your balance with them

A credit card company MUST keep their interest rate the same for a minimum of two years.

• True

• False

All lenders are required by law to calculate APR the same way.

• True

• False

Origination fees are often associated with _________.

• Credit cards

• debit cards

• home loans

• payday loans

The longer you keep a loan, the __________ your monthly payment

• lower

• higher

The longer you keep a loan, the __________ the interest paid.

• lower

• higher