Chapter 18: Consumer Credit

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

• True

• False

If you borrowed $100 for one year and paid $110 at maturity, the interest rate you paid would be 10 percent.

• True

• False

People who use affinity cards are usually expected to pay the full balance each month.

• True

• False

An installment loan is one in which you agree to make monthly payments in specific amounts over a period of time.

• True

• False

A person’s reputation for paying bills on time is known as collateral.

• True

• False

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

• True

• Falses

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

• True

• Falses

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

• True

• False

The Consumer Credit Reporting Reform Act places the burden of proof for accurate credit information on you rather than the credit reporting agency.

• True

• False

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

• True

• False