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WorksheetsTypes and Sources of Credit 16.2
Total questions: 30
Worksheet time: 23mins
Credit cards are a form of
Open-ended credit
Closed credit
Revolving credit
Swing credit
When you pay on credit balances,
The limit allows for more credit
You reduce your balance
You increase finance charges
You lower your credit score
With a charge card agreement,
You agree to pay any amount you feel necessary
You agree to pay a portion of the balance
You agree to pay the full balance at the end of each month
American Express and Diner's Club are examples of
Revolving Credit
Debit cards
Credit cards
Charge cards
Visa, Master Card, Belk cards, JC Penney cards and Discover are examples of
Charge cards
Revolving Accounts
Grace periods
Closed-end credit
With which accounts do consumers have the option of paying in full or making minimum payments (stated by company)
Closed-end credit account
Charge accounts
Revolving accounts
Transaction accounts
Annual Percentage Rate or APR is
Cost of credit expressed as a weekly percentage
Cost of credit expressed as a bi-weekly percentage
Cost of credit expressed as a monthly percentage
Cost of credit expressed as a yearly percentage
What document requires that the lenders include the APR for all loans
The Truth-in-Lending Law
Full Disclosure
Loan documents
Loan Shark Law
Time-frame within which you may pay your current balance in full and incur no interest charges
Truth-in-Lending period
Grate period
Grace period
APR days
Normal length of grace period
5 - 10 days
10 - 15 days
10 - 20 days
10 - 25 days
Fees ranging from $15 - $35 that credit card companies can charge once per year for use of their card
Annual fees
Credit fees
Credit card fees
Membership fees
You pay annual fees whether you use the credit card or not
True
False
You cannot be charged a transaction fee for using a credit card check, pay by phone or requesting a balance
True
False
What could you have to pay if you go over your credit limit or make a late payment
Grace period fees
Transaction fees
Penalty fees
Collection fees
What do we use to pay for expensive items like cars, furniture or major appliances
Open-ended credit
Revolving credit
Closed-end credit
Annual credit
Another name for closed-end credit is installment credit
True
False
Characteristics of closed-end credit
Paying loans in full by a stated date
Continuous borrowing
Varying payment amounts
Paying a specific amount each time for a specific time period
With a closed-end loan, what is the collateral for the loan
Money
Personal items
Items or products purchased with the loan
Your car
Telephone companies, SCE &G, Doctors, Lawyers and Dry cleaners are all example of
Retail credit
Service credit
Utility credit
Open-ended credit
Sources of Credit include
Retail stores
Credit Card Companies
Banks, Credit Unions and Finance Companies
All of these are sources of credit
A source(s) of credit include
Pawnbrokers
Private lenders, borrowing (against life insurance policies)
All of these
None of these
Borrowing against a deposit or an asset
What is a cash advance
Money borrowed against your line of credit
Money from the ATM
Cash back when you cash a check
Income tax return
what are credit cards sponsored by professional organizations or college alumni association
Alumni cards
Bank cards
Affinity cards
Access cards
What is the difference in charge cards and credit cards
Credit card balance must be paid in full at the end of the month but charge card balance can be carried over
Charge card balance must be paid in full at the end of the month but credit card balance can roll over
No real difference
Both card balances can be paid in installments and new balances can carry over.
Banks and credit unions
Only offer checking and savings accounts
Offer checking and savings accounts and loans to all
Offer checking and savings accounts, loans and credit cards
Offer checking and savings accounts, credits and loans to customers and members
Which companies make loans to high risk consumers with high interest
Credit unions
Banks
Finance companies only
Finance Companies and Pay-Day Loan Stores
What's a Loan Shark
Shady Sam
Unlicensed lender who charge high interest rate
A type of consumer finance company
State law that set a maximum for interest rate for consumer loans
Interest Laws
High Interest Laws
Consumer Protection Laws
Usury Laws
Businesses that make high interest loans based on the value of personal possessions pledged as collateral
Pawnmaker
Pawnsponge
Pawnbroker
Collateral Keeper
What happens to collateral when a loan is not repaid
It is returned to the debtor
Creditor keeps it in his/her possession
It is sold to repay the loan
It is sold and profits are given to the poor
