PFM UNIT 3 REVIEW CORRECT
QUESTIONS & ANSWERS
Cash advance - ANSWER Money borrowed against the credit limit (line of credit)
Usury Laws - ANSWER Maximum interest rates are set up by these laws in certain
states
Debt collector - ANSWER A person hired to collect the overdue balance
Credit Bureaus - ANSWER A business that accumulates, stores, and distributes credit
information to members.
5 Cs of credit - ANSWER 1. Capacity
2. Character
3. Collateral
4. Conditions
5. Capitol
Principal - ANSWER The amount that is financed or borrowed, on which interest is
computed.
Major Credit Bureaus - ANSWER 1. Equifax
2. TransUnion
3. Experion
Debtor - ANSWER Someone who borrows money from others
Creditor - ANSWER A person or business that loans money to debtors
Finance charge - ANSWER The interest paid for the use of credit
Phishing - ANSWER A scam that uses online pop up messages or e-mail to deceive
you into enclosing personal information
Encryption - ANSWER A code that protects your account name, number and other
information.
Simple interest - ANSWER To determine interest with the formula, I = PRT
Rebate plan - ANSWER You get back a portion of what you spent in credit purchases
over the year.
QUESTIONS & ANSWERS
Cash advance - ANSWER Money borrowed against the credit limit (line of credit)
Usury Laws - ANSWER Maximum interest rates are set up by these laws in certain
states
Debt collector - ANSWER A person hired to collect the overdue balance
Credit Bureaus - ANSWER A business that accumulates, stores, and distributes credit
information to members.
5 Cs of credit - ANSWER 1. Capacity
2. Character
3. Collateral
4. Conditions
5. Capitol
Principal - ANSWER The amount that is financed or borrowed, on which interest is
computed.
Major Credit Bureaus - ANSWER 1. Equifax
2. TransUnion
3. Experion
Debtor - ANSWER Someone who borrows money from others
Creditor - ANSWER A person or business that loans money to debtors
Finance charge - ANSWER The interest paid for the use of credit
Phishing - ANSWER A scam that uses online pop up messages or e-mail to deceive
you into enclosing personal information
Encryption - ANSWER A code that protects your account name, number and other
information.
Simple interest - ANSWER To determine interest with the formula, I = PRT
Rebate plan - ANSWER You get back a portion of what you spent in credit purchases
over the year.
