Title: QUIZ: Buy Now, Pay Later: A Credit Alternative -- Page One Economics®
Course: Andria FRE > Section: Buy Now, Pay Later: A Credit Alternative -- Page One Economics®

Q: What did General Motors Acceptance Corporation (GMAC) introduce in 1919?
- Credit cards with rewards (That is incorrect.)
- The first layaway plan (That is incorrect.)
- Installment loans for car buyers (That's correct!)
- Interest-free loans for car buyers (That is incorrect.)
A: Installment loans for car buyers

Q: According to surveys, what is the top reason people use BNPL?
- To build credit (That is incorrect.)
- To spread out payments (That's correct!)
- To earn points and rewards (That is incorrect.)
- To avoid taxes (That is incorrect.)
A: To spread out payments

Q: How do BNPL providers earn most of their revenue?
- From interest charges to users (That is incorrect.)
- From annual membership fees (That is incorrect.)
- From late payment fees by users (That is incorrect.)
- From fees paid by retailers (That's correct!)
A: From fees paid by retailers

Q: How do BNPL loans differ from credit cards?
- BNPL loans are tied to one specific purchase. (That's correct!)
- BNPL has higher interest rates for users. (That is incorrect.)
- BNPL is a type of revolving loan with rewards. (That is incorrect.)
- BNPL loans are not subject to the Truth in Lending Act. (That is incorrect.)
A: BNPL loans are tied to one specific purchase.

Q: What is a common risk for BNPL users?
- Declining credit card rewards (That is incorrect.)
- Overspending and having multiple loans (That's correct!)
- Higher credit limits (That is incorrect.)
- Fewer payment options (That is incorrect.)
A: Overspending and having multiple loans

Q: What is one major advantage of BNPL for retailers?
- It reduces sales volume (That is incorrect.)
- It decreases customer spending (That is incorrect.)
- It attracts younger consumers (That's correct!)
- It eliminates transaction fees (That is incorrect.)
A: It attracts younger consumers

Q: What type of loan is BNPL?
- Mortgage (That is incorrect.)
- Revolving (That is incorrect.)
- Installment (That's correct!)
- Credit card (That is incorrect.)
A: Installment

Q: What action did the Consumer Financial Protection Bureau require BNPL lenders to take in 2024?
- Eliminate all retailer fees (That is incorrect.)
- Provide consumer dispute investigations (That's correct!)
- Stop automatic payments (That is incorrect.)
- Offer only paper-based contracts (That is incorrect.)
A: Provide consumer dispute investigations

Q: BNPL loans are usually set up for users to pay ___________
- with cash and in-person every month. (That is incorrect.)
- using a debit card, credit card, or checking account. (That's correct!)
- with a money order or cashier’s check. (That is incorrect.)
- using cash or cashier’s check on a weekly basis. (That is incorrect.)
A: using a debit card, credit card, or checking account.

Q: The Federal Trade Commission recommends checking the details of a BNPL plan ___________
- after making the final payment. (That is incorrect.)
- before making an agreement. (That's correct!)
- after securing three or more loans. (That is incorrect.)
- when the first installment is due. (That is incorrect.)
A: before making an agreement.