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CREDIT CARD BLOCKTo be sure you don’texceed your credit cardlimit, a hotel puts a blockon your funds. How canthis cause a problem?transaction is approved, your available credit is reduced by this amountimmediately. This procedure is called a block. It is used to make sure youdon’t exceed your credit.If you pay your bill with the same card you used when you checkedin, the final charge should replace the block in a day or two. If you payyour bill with a different card, or with cash or a check, the issuer of thecard you presented first might hold the block for up to 15 days. Toprevent problems, have the clerk tell the card issuer that you paid anotherway so that the block is removed.Reviewing What You Learned1. What is the difference between open-endcredit and closed-end credit? Give anexample of each.2. What does the Truth-in-Lending Act requirelenders to tell you?3. Describe a secured loan.4. How much does the average credit cardholder have in outstanding credit card debt?What is the average interest rate he or she ispaying?Critical Thinking ActivityEconomics React to this statement: “America’seconomic strength is in part due to the abilityof people to borrow money and makepurchases on credit.” Do you agree or disagree?Explain your answer.Legal Skills in ActionResponsible Use of Credit Many teenagersuse credit cards—either their parents’ or theirown. Some teenagers use credit cards foremergencies only; others use them for everydaypurchases and activities. With a partner, debatethe role of credit in society today. Explain yourphilosophy on using credit. Describe how youthink credit problems could be prevented.492 Unit 5: Using Your Purchasing Power