Intro to Consumer Credit: Quiz 1

Which items can you purchase with credit rather than cash? 

• Car

• Computer

• House

• Gas

• Food

All of the following are pros of credit use except

• You can buy now and pay later.

• Credit is more convenient than cash.

• Buy items at the best cash even if you don't have the cash to pay for them now.

• Credit has a cost.

Which of the following are lending institutions that offer credit

• Banks

• Consumer Finance Companies

• Credit Unions

• Personal Loan Shops

• Earl's Groovy Alley Service

partners with businesses to provide loans to consumers for purchasing goods and services

• consumer finance company

• credit union

• personal loan shop

• bank

provides loans only to members who are also depositors

• consumer finance company

• credit union

• personal loan shop

• bank

provides loans for short periods at a high interest rate

• consumer finance company

• credit union

• personal loan shop

• bank

provides loan to consumers and businesses

• consumer finance company

• credit union

• personal loan shop

• bank

Consumers take out__________ loans for a specific purpose.

• closed-end credit

• Open-ended-credit

A __________doesn’t charge interest if the balance of the account is paid off within a specified amount of time.

• Introductory Interest Free

• Charge Cards

• Rent to Own

• Deferred Payment Plan

The consumer doesn’t purchase an item up front but instead rents it for a certain period. The consumer makes monthly payments, which are typically lower than payments made under an installment plan.

• Introductory Interest Free

• Charge Cards

• Rent to Own

• Deferred Payment Plan