Credit and Loans Questionnaire

Description

1. It may make economic sense to use credit for a purhcase if using credit:

Group of answer choices

is cheaper than using a credit card for the purchase.

enables you to take advantage of a sale on a planned purchase of a necessary item.

is likely to have no impact on your future earning power.

allows you to enjoy a consistent standard of living.

2. With respect to a revolving credit account:

Group of answer choices

the original amount borrowed is the present value of the stream of future payments, or the present value of the annuity.

the account holder is able to borrow up to a preset limit each period and pay the balance back over time.

the entire loan must be repaid as a lump sum on or before the due date.

All of the above are true with respect to a revolving credit account.

3. If you have a gym membership, then:

Group of answer choices

it is likely to help your traditional credit score in a positive way.

not making regular payments on it can hurt your credit score.

the payments are automatically reported to the main credit bureaus.

it will make it more difficult to qualify for a credit card account

4. Commercial banks:

Group of answer choices

such as Chase and Bank of America issue the majority of American Express and Discover Card accounts.

are the number one source of consumer credit in the U.S.

guarantee loans that are in the interest of public policy.

do not require proof of income or permanent address and so are able to charge much higher rates than other lenders

5. Which of the following statements regarding consumer credit is NOT true?

Group of answer choices

Taking advantage of the ignorance or necessitous condition of a borrower is one definition of usury.

Car title loans offer fast cash which gives the lender the ability to take advantage of borrowers.

Predatory lending imposes unfair or abusive loan terms on a borrower.

Usury is lending money at excessively high rates of interest which is illegal according to federal laws in the U.S.

Tags: economics consumer credi traditional credit score
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