Credit (Unit 16)

*Billy buys a car now, but he doesn't have to pay for it until later because he purchased it with ____.

• credit

• interest

• loyalty

• convenience

*What type of credit account gives the customer a credit limit at the time the account is opened and allows the customer to make payments over a period of time or to pay off the total amount due each month?

• installment

• revolving

• regular

• budget

*Johnny purchased a television on credit. She made a down payment and signed an agreement to pay a specific monthly amount, including interest, over the next 12 months. This is an example of ____

• budget

• revolving charge

• installment

• regular

*If you purchase a car, which type of credit are you most likely to use?

• revolving

• budget

• regular

• installment

*Regular credit accounts are sometimes called open accounts because they allow ____.

• long-time credit users to purchase items without finance charges

• first-time credit users to charge without having a credit check

• credit users to make purchases at any time during a set period

• credit users to make the minimum payment at any time during the month

*Which of the following is a true statement about bank credit cards?

• Borrowers must pay the balance in full each month.

• Bank credit cards are the same as installment credit.

• Bank credit cards are often difficult to obtain.

• Businesses must pay the bank a fee for each transaction.

*A person uses electricity before she pays for it. Which type of credit is the person using?

• Unsecured loan

• Secured loan

• Service Credit

• Revolving Credit

*What type of loan requires collateral?

• Note

• Signature

• Unsecured

• Secured

*Which of the following is true of unsecured loans:

• They are another way to refer to secured loans.

• They are usually made to people who have excellent credit rating.

• They are typically made for longer periods of time than secured loans.

• They are designed for people who have poor credit ratings.

*Which of the following statements describes commercial banks?

• They are full-service banking institutions.

• They began as home loan institutions.

• They are cooperative financial institutions that are owned by their members.

• They are lenders that offer credit through retailers such as car dealerships.