Download Credit Cards and Other Forms of Credit

Name:
Date:
CHAPTER 1 1
Credit Cards and Other Forms of Credit
VOCABULARY CHECK
1. Justin received an application in the mail for a
credit card
, but his parents advised him not to
apply.
credit provider
2. The
Bank.
3. The bank ran a
received her loan.
on Morgan’s credit card is MyWay
credit check
on Shawna before she
overdraft protection
4. Tina’s credit card company offers
that
allows her to exceed her credit limit—but at a hefty cost.
5. Tera is upset about the $39
card company charges every year.
grace period
6. Asa has a 20-day
bill before it becomes past due.
7. Cord went to the ATM to get a
credit card to pay for movie night.
annual fee
her credit
to pay her credit card
annual fee
bankruptcy
cash advance
credit card
credit check
credit provider
debt consolidation
grace period
overdraft
protection
pawnbroker
payday lending
cash advance
from his
debt consolidation
8. Melody wants to use
to combine her school loans and credit
card debt in order to have a smaller payment.
9.
Bankruptcy
is the last resort to clear up debt and is reported to the credit
bureau.
10. The money Rex received from
rowed for a two-week loan.
payday lending
cost him $100 over what he bor-
11. Jordan put his golf clubs up as collateral for a loan with the
pawnbroker
.
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Name:
Date:
CHAPTER 1 1
Credit Cards and Other Forms of Credit
CHECK YOUR KNOWLEDGE
Multiple Choice Questions Circle the correct answer for each of the following.
1. Credit cards are __________.
a. revolving open-end credit b. fixed term loan credit
c. adjustable rate loan credit
d. long-term credit
2. Which of the following is not an advantage of using credit cards?
a. keeps you from having to carry cash or checks
b. makes it easier to carry a low interest balance c. no interest charges accrue if balance is paid in full every cycle
d. all of the above
3. Which of the following is a reason that merchants accept credit cards?
a. decrease sales volume
b. encourages more purchases c. saves the merchant money
d. all of the above
4. A person’s credit limit is __________.
a. the maximum amount that may be borrowed
b. irrelevant when making purchases
c. unrelated to her credit history
d. always below $1,000
5. Credit card grace periods are typically __________.
a. 1 to 5 days
b. 5 to 10 days
c. six months
d. 20 to 30 days 6. Credit card cash advances using an ATM are a(n) __________ source of funds.
a. cheap
b. costly c. cost neutral
d. inaccessible
7. The process of combining several small loans into one larger loan that often carries a
more favorable interest rate or maturity is known as __________.
a. rollover
b. debt consolidation c. payment branching
d. combination cash
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8. One new form of lending that provides low interest loans to most consumers is known
as __________.
a. pawnbroking
b. payday lending
c. tax refund lending
d. none of the above 9. Pawn shops loan money in exchange for __________.
a. your signature
b. your paycheck
c. holding some collateral, such as jewelry d. none of the above
10. Cell phone leases are typically for __________.
a. one month
b. two weeks or less
c. five years
d. one year SCANS Foundation Skills: Basic
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