POB Ch 26 & 27

Credit cards

• come with a cost.
• always have the same interest rate.
• are available to everyone.
• allow credit card holders to pay less for merchandise.

To qualify for a low interest APR, consumers should

• earn a lot of money.
• owe no money.
• pay their bills on time.
• have an advanced degree.

In the context of this chapter, interest is

• the amount of money charged to borrow money.
• something that is intriguing.
• the amount of money a company pays a borrower to use their credit card.
• your curiosity.

If a borrower is late making a payment, a credit card company may

• charge less interest until they catch up.
• lower their monthly fee.
• overlook the late payment until the borrower decides to pay.
• charge a higher fee to use the card.

In terms of creditworthiness, capacity refers to

• a borrower’s trustworthiness in repaying a debt.
• the ability to repay a loan.
• the amount of money a borrower owes.
• a borrower’s character.

People who consistently make the minimum payment required by a credit card company usually

• pay off their balances quickly.
• pay more interest.
• pay less interest.
• have a number of credit cards.

A mortgage is a loan secured by

• automobiles.
• appliances.
• property.
• stock options.

It is good to get a fixed-rate mortgage when interest rates are

• low.
• high.
• stagnant.
• steady.

Generally, the higher the down payment made,

• the less money owed.
• the higher interest charged.
• the longer it will take to pay off a loan.
• none of the above

A secured loan is secured by

• a fixed interest rate.
• collateral.
• a variable APR.
• a promise to pay.