Chapter 18 Test Review

It is illegal for a state or local government to purchase goods on credit.

• True

• False

People who use affinity cards are usually expected to pay the full balance each month.

• True

• False

A person’s reputation for paying bills on time is known as collateral.

• True

• False

A creditor is a business or individual who is willing and able to provide information about your creditworthiness.

• True

• False

The Consumer Credit Reporting Reform Act places the burden of proof for accurate credit information on you rather than the credit reporting agency.

• True

• False

Anyone who buys on credit is called a(n)

• entrepreneur.

• creditor

• debtor

• payee

This type of charge account requires the buyer to make full payment within a stated period.

• revolving charge account

• budget charge account

• regular charge account

• sales charge account

Which of the following is an example of a bank card?

• American Express

• Diners Club

• MasterCard

• all of the above

Which of the following is a disadvantage of using credit?

• credit rating

• convenience

• immediate possession

• overbuying

To make the computation of interest easier, a year is often considered as

• 360 days

• 365 days

• 364 days

• 400 days