Chapter 18 Principles of Business and Marketing - Credit

It is illegal for a state or local government to purchase goods on credit.

• True

• False

A person's reputation for paying bills ontime is known as collateral.

• True

• False

The cost of using someone else's money is called interest.

• True

• False

The Federal Trade Commission reports that credit card fraud is a major problem.

• True

• False

A creditor is a business or individual who is willing and able to provide information about your creditworthiness.

• True

• False

People who use affinity cards are usually expected to pay the full balance each month. (An affinity card is a credit card usually associated with a bank or other organization that agrees to donate to a charitable source each time the card is used)

• True

• False

If you borrowed $200 for one year and paid $220 at maturity, the interest you paid would be 20 percent.

• True

• False

The date on which a loan must be repaid is the maturity date.

• True

• False

Anyone who buys on credit is called a (n)

• entrepreneur

• debtor

• payee

• creditor

This type of credit occurs when a company receives goods from a supplier and pays for them later.

• trade credit

• property credit