The finance charge pays the business in part, for its expense in keeping track of your account and its balance. Regardless of the purpose for which a credit card is to be used, including business, commercial, or agricultural use, no credit card shall be issued to any person except: (1) In response to an oral or written request or application for the card; or (2) As a renewal of, or substitute for, an accepted credit card. However, a creditor may impose reasonable payment requirements, such as specifying the address to which payments must be sent or that payment be made in U.S. dollars. Lenders incorporate the expected rate of inflation when deciding how much interest to charge. With a debt . For example, payment for workmen's compensation insurance under either a compulsory or elective State statute are not considered payments for fringe benefits under the Act. Credit cards and open-end lines of credit are examples. Ann. Which of the following actions is not allowed? (see Kan. U.C.C. if the credit is refused, the creditor, on demand, must disclose the reasons for rejection. For an open‑end credit plan, "total loan amount" means the borrower's initial maximum credit limit. ... 167) The expected rate of inflation should not be considered when determining the amount of interest a creditor should charge. In this kind of credit the lender extends credit for use by the consumer, with an outside limit that depends on the debtor’s credit history and ability to handle the debt repayment. The account is not considered past due as long as you make payments according to the terms to which you agreed. Unless you pay off the debt in full each month, you will often have to pay a high-rate of interest or other kinds of finance charges for the use of credit. Covered loan means a consumer credit transaction secured by property located within this state that is considered a mortgage under section 152 of the federal "Home Ownership and Equity Protection Act of 1994", 15 U.S.C. The property secured by the loan will be offered up for sheriff's sale during the waiting period. A credit card is an example of an open-end consumer loan. In today’s environment, open-end credit generally includes accounts with much larger lines of credit and higher risk levels. Approximately one-fifth of loans granted by consumer finance companies are for debt consolidation. The FCBA, however, does not apply to installment loans like mortgages, auto loans, or personal loans which you repay on a fixed schedule. Finance Charge Calculation (226.4) b. Ann. 2. Extension of credit. Thus, Choice A is the best one offered. You typically use credit cards to make purchases. rated based on the number of recently opened accounts and the number of recent credit inquiries (10%) Types of credit used. For example: i. (d) For purposes of Sec. Similarly, assume a transaction in which the person extending open-end credit is a financial institution under § 1003.2(g) but is not a creditor under Regulation Z, § 1026.2(a)(17). §1638. alimony received and child support payments are not considered sources of income. sec. DEFINITION OF CLOSED END CREDIT DEFINITION OF FINANCE CHARGE Yes/No Comments 1. Consumer credit classified as a loss—Closed-end consumer credit delinquent 120 days or more—5 monthly payments or more—and open-end consumer credit delinquent 180 days or more—seven zero-billing cycles or more. In 1980, open-end credit generally consisted of credit card accounts with small credit lines that limited the exposure an institution had to an individual borrower. 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