Studied by 12 peopleAn installment loan is one in which you agree to make monthly payments in specific amounts over a period of time
true
car loans, mortgage loans and credit cards all have the same interest rate
false
if you cannot pay your bills, the last thing you should do is contact the creditor
false
the most important thing that Mr. Grigg will teach you all semester is not to ruin your debt/income ratio
true
it is illegal for a state or local government to purchase goods on credit
false
a person’s reputation for paying bills on time is known as collateral
false
a credit application is a business or individual who is willing and able to provide information about your creditworthiness
false
the APR includes both service charges and interest
true
the consumer credit reporting reform act places the burden of proof for accurate credit information on you rather than the credit reporting company
false
you are not allowed to pay your own student loans while you are still attending college
false
the cost of using someone else’s money is called interest
true
simple interest =
P x R x T
your honesty and willingness to pay a debt when it is due
character
this law or act states companies must correct billing mistakes in a timely fashion
fair credit billing act
the creditor’s belief that the debtor will honor the promise to pay later for goods and services that have already been received and used
trust
A _____ has your account numbers on it and is a written form that acknowledges that payment was made
loan receipt
the ratio that college kids ruin and cant buy a house is called the…
debt/income ratio
businesses or individuals from whom you have received credit in the past and/or who can help verify your credit record
credit references
which of the following is NOT a provision of the Equal Credit Opportunity Act
prevents creditors from looking into your creditworthiness
which loan usually comes with a better interest rate
secured loan
if you cannot pay your bills you should never
respond to an ad claiming to “erase bad credit”
which of the following is not one of the 3 C’s of credit
credit reference
a credit plan that allows purchases to be charged at any time but requires that at least part of the debt be repaid each month
revolving charge account
the R in the simple interest formula stands for what
rate
which of the following require disclosure of the APR
both a and b
the truth-in-lending-law limits your liability to ___ for unauthorized credit card purchases made prior to notifying the card issuer
$50
the date on which a loan must be repaid in full
maturity date
property that is offered as security for some loan agreements
collateral
a _____ can help you make money with cash back incentives
credit card
the percentage cost of credit on a yearly basis is
annual percentage rate
one who buys on credit or receives a loan
debtor
which of the following is an example of a bank card
mastercard
your ability to pay a debt when it is due
capacity
a ______ is an initial payment of part of the purchase price that is made as part of a credit agreement
down payment
______ is a special insurance that repays the balance of the amount owed if the borrower dies. you should never buy this insurance
credit life insurance
a _____ is someone who becomes responsible for payment of the note if the debtor does not pay as promised
cosigner
a company that gathers information on credit users and sells it to businesses that offer credit is called
credit bureau
anyone who buys on credit is called
debtor
a statement will report all of the following information except
whether the item was purchased on sale
T in simple interest formula stands for time. time is expressed in what
years
a type of loan in which the lender has the right to sell property used as collateral to get back the amount of the loan in the event the loan is not repaid is an
secured loan
what figure can car salesman use to make a deal look good
monthly payment
a company that attempts to obtain money that is past due is called
debt collection agency
this regulation requires that you be told the cost of credit before signing an agreement
truth-in-lending law
a maximum amount you are allowed to owe at one time on your credit account is called
credit limit
which of the following will not help you to establish a good record of creditworthiness
changing jobs very frequently
which of the following is a disadvantage of using credit
overbuying
a car loan is a great example of an
installment loan
a written promise to repay based on debtor’s excellent credit history is an
promissory note
the value of the borrower’s possessions
capital
Note 
Flashcard (102)