Concept Check 5-2 and 5-5

Topics: Debt, Credit card, Credit Pages: 2 (500 words) Published: April 1, 2014
1.What are the two types of consumer credit??
Two types of consumer credit are closed-end and open-end are . With closed-end borrower pay back a one-time loan in a specific number of payments and period of time. With open-end credit borrower is permitted to take loans on a continuous basis and is billed periodically.

2.Match the following key terms with the appropriate definition.
a.closed-end creditbOne-time loan paid back in a specified time in payments of equal amounts.
b.open-end creditaA line of credit in which loans are made on a continuous basis.
c.line of creditcThe dollar amount paid to use the credit.
d.interesteThe total amount paid to use the credit.
e.finance chargedA periodic charge for the use of credit.

3.What are the major sources of:
Inexpensive LoansMedium-priced LoansExpensive Loans
ParentsCommercial BanksFinance Companies
Family MembersSavings and LoansRetail Stores
FriendsCredit UnionsCredit Cards (cash advances)

4.What is the difference between a credit card and a debit card?

A credit card extends credit and delays your payment. A debit card electronically subtracts money from your savings or checking account to pay for goods and services.

CONCEPT CHECK 5-5 (p. 146)

1.What steps might you take if there is a billing error in your monthly statement?

Notify creditor in writing, and include any information that might support your case. Pay the portion of the bill that is not in question.

2.What steps would you take if someone stole your identity?

Contact the credit bureaus and tell them to flag your file with a fraud alert. Contact the creditors and follow up in writing.
File a police report and keep a copy of the report.

3.How might you protect your credit information on the internet? Use a secure browser, keep records of online transactions, review your monthly statements; read the privacy and security policies, keep your personal information private, never...
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