FIN 400 CH 6 Test with Questions and
Answers
Definition of previous balance method ANSWER A method of calculating interest payments
on outstanding credit using the balance at the end of the previous billing period.
Definition of secured credit card ANSWER A credit card backed by the pledge of some
collateralized asset.
Definition of single-purpose card ANSWER A credit card that can be used only at a specific
company.
Definition of merchant's discount fee ANSWER The percentage of the sale that the merchant
pays to the credit card issuer.
Definition of traditional charge account ANSWER A charge account, as opposed to a credit
card, that can be used to make purchases only at the issuing company.
Definition of identity theft ANSWER The use of your name, address, social security number
(SSN), bank or credit card account number, or other identifying information by someone
other than you without your knowledge to commit fraud or other crimes.
Definition of adjusted balance method ANSWER A method of calculating interest payments
on outstanding credit in which interest payments are charged against the balance at the end of
the previous billing period less any payments and returns made.
Definition of credit ANSWER Receiving cash, goods, or services with an obligation to pay
later.
Answers
Definition of previous balance method ANSWER A method of calculating interest payments
on outstanding credit using the balance at the end of the previous billing period.
Definition of secured credit card ANSWER A credit card backed by the pledge of some
collateralized asset.
Definition of single-purpose card ANSWER A credit card that can be used only at a specific
company.
Definition of merchant's discount fee ANSWER The percentage of the sale that the merchant
pays to the credit card issuer.
Definition of traditional charge account ANSWER A charge account, as opposed to a credit
card, that can be used to make purchases only at the issuing company.
Definition of identity theft ANSWER The use of your name, address, social security number
(SSN), bank or credit card account number, or other identifying information by someone
other than you without your knowledge to commit fraud or other crimes.
Definition of adjusted balance method ANSWER A method of calculating interest payments
on outstanding credit in which interest payments are charged against the balance at the end of
the previous billing period less any payments and returns made.
Definition of credit ANSWER Receiving cash, goods, or services with an obligation to pay
later.
