Question

1. which of the following is true about cell phone leases? a) because it is a form of credit, a cell phone lease requires collateral. b) if you default on a cell phone lease, it will appear on your credit report. c) it is not legal for a cell phone company to charge an early termination fee when a customer wants to end the contract. d) most cell phone providers require that you sign a one - month lease.

Explanation:

• Option A: Cell - phone leases are a form of credit, but they do not require collateral. Collateral is typically associated with loans like mortgages (where the house is collateral) or some auto - loans.
• Option B: A cell - phone lease is a financial obligation. When a customer defaults (fails to make payments as per the lease agreement), it is reported to credit bureaus. This is similar to how defaulting on a loan (e.g., a student loan) affects a credit report.
• Option C: It is legal for cell - phone companies to charge an early termination fee. The lease is a contract, and if a customer breaks the contract (by ending it early), the company can enforce the fee as per the terms of the agreement.
• Option D: Most cell - phone leases are for longer periods, such as 12 - 24 months. One - month leases are not the norm.

Answer:

B. If you default on a cell phone lease, it will appear on your credit report.