Laws and regulations can be confusing.

• Position: Credit Cards - Quiz

For decades, consumer credit laws such as the Truth in Lending, Fair Credit Reporting, and Equal Credit Opportunity acts have been initiated to prevent abuses within the credit card industry nationwide. However, do consumers really know what these laws mean to them? Mike Sullivan, director of education for Take Charge America, Inc., Phoenix, Ariz., says that the growing number of credit card applicants and users need to gain a better understanding of current credit card laws and practices to protect themselves from possible abuses.

For consumers who would like to test their skills regarding credit card laws and company procedures, Sullivan has devised the following true or false quiz:

1. Once you reach the age of 62, credit companies can cancel your credit because you may be nearing retirement.

2. The interest rate on a credit account is the same thing as the APR (annual percentage rate).

3. Insurance companies can use your credit rating as a factor in evaluating your insurability.

4. The Truth in Lending Act requires creditors to compute finance charges based on your average daily balance.

5. Credit card companies can turn an applicant down due to the applicant's age.

6. Creditors must give you at least a 25-day grace period before applying finance charges.

7. Credit card companies can evaluate your character to determine if you should be issued a credit card.

8. Creditors can ask for information about savings and investments when determining if you should get credit.

9. Credit card companies cannot deny you a card just because you are single.

10. Credit card companies can deny an applicant because they receive public assistance.

    Answers:

1. False. According to the scope of prohibition clause, "It shall be unlawful for any creditor to discriminate against any applicant ... on the basis of race, color, religion, national origin, sex or marital status, or age...."

2. False. Annual percentage rate is defined as "that ... which will yield a sum equal to the amount of the finance charge when it is applied to the unpaid balance of the amount financed ..."

3. True. Credit laws do not specifically preclude this practice, and therefore insurance companies can use credit information in their assessment if the information is otherwise unavailable to them.

4. False. Credit laws do not specifically require this practice, and therefore credit companies are not necessarily obliged to do so.

5. True. While this statement appears to violate the age discrimination aspect...