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69 Cards in this Set
- Front
- Back
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Three reasons to use credit |
Education, medical expenses, housing |
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Things factored into credit score |
Debt, number of credit cards, available debt, pursuing credit, credit history |
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Biggest determiner of credit score |
Payment history |
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Percentages |
35% payment history, 30% outstanding debt, 15% credit history, 10% pursuit of new credit, 10% types of credit in use |
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Percentages |
35% payment history, 30% outstanding debt, 15% credit history, 10% pursuit of new credit, 10% types of credit in use |
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Grace period |
Window to pay off debt |
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Percentages |
35% payment history, 30% outstanding debt, 15% credit history, 10% pursuit of new credit, 10% types of credit in use |
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Grace period |
Window to pay off debt |
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APR |
Annual percentage rate |
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Average daily balance billing method |
Credit card accounting method were interest charges are based on amount owed end of the day |
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Two cycle billing |
Allows credit card issuers to apply interest charges to two full cycles of card balances versus most recent cycle balance |
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Two cycle billing |
Allows credit card issuers to apply interest charges to two full cycles of card balances versus most recent cycle balance |
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Credit limit |
Maximum amount credit card company will allow someone to borrow on a single card |
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Two cycle billing |
Allows credit card issuers to apply interest charges to two full cycles of card balances versus most recent cycle balance |
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Credit limit |
Maximum amount credit card company will allow someone to borrow on a single card |
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Default |
Occurs when a debtor is unable to meet the legal obligation of debt repayment |
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Two cycle billing |
Allows credit card issuers to apply interest charges to two full cycles of card balances versus most recent cycle balance |
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Credit limit |
Maximum amount credit card company will allow someone to borrow on a single card |
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Default |
Occurs when a debtor is unable to meet the legal obligation of debt repayment |
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Universal default |
Increase interest for late payments |
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Two cycle billing |
Allows credit card issuers to apply interest charges to two full cycles of card balances versus most recent cycle balance |
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Credit limit |
Maximum amount credit card company will allow someone to borrow on a single card |
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Default |
Occurs when a debtor is unable to meet the legal obligation of debt repayment |
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Universal default |
Increase interest for late payments |
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Annual fee |
Fee to use credit card each year |
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Two cycle billing |
Allows credit card issuers to apply interest charges to two full cycles of card balances versus most recent cycle balance |
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Credit limit |
Maximum amount credit card company will allow someone to borrow on a single card |
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Default |
Occurs when a debtor is unable to meet the legal obligation of debt repayment |
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Universal default |
Increase interest for late payments |
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Annual fee |
Fee to use credit card each year |
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Late payment fee |
Literally exactly what it sounds like |
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Rewards / cash back |
Percent of spent money goes back to credit card holder |
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Over the credit limit fee |
Fee for exceeding the credit limit |
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Over the credit limit fee |
Fee for exceeding the credit limit |
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Cash advance |
Cardholders can withdraw cash up to a certain limit |
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Over the credit limit fee |
Fee for exceeding the credit limit |
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Cash advance |
Cardholders can withdraw cash up to a certain limit |
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Balance transfer |
Transfer of the bounce from one account to another |
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Minimum finance charge |
Minimum amount of interest you have to pay a credit card company in a particular billing cycle when you carry a balance |
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Unsecured debt |
Credit cards |
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Secured debt |
Mortgage student loans car loans |
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Incentives |
Cashback, miles, gas, hotels, whatever |
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Incentives |
Cashback, miles, gas, hotels, whatever |
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Truth in lending act |
Ensures that consumers are aware of cost and conditions of borrowing |
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Fair credit reporting act |
Protect the privacy and accuracy of information in a credit check |
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Equal opportunity act |
Prohibits discrimination and giving credit on basis of sex, religion, race… |
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Fair credit billing act |
Sets up procedure for the quick correction of mistakes on consumer credit account |
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Fair credit billing act |
Sets up procedure for the quick correction of mistakes on consumer credit account |
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Fair debt collection practices act |
Prevent abuse by debt collectors |
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Credit rating |
Helps lenders know if you're a risk |
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high FICO score |
Lower interest |
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high FICO score |
Lower interest |
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Debt consolidation loan |
Combining all debts into one payment meaning smaller monthly payments for a longer time with more interest |
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high FICO score |
Lower interest |
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Debt consolidation loan |
Combining all debts into one payment meaning smaller monthly payments for a longer time with more interest |
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The three C's of credit |
Character – are you reliable Capacity – can you repay the loan Capital – do you have any assets that can be used to repay the loan |
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Cosigner |
Legally responsible to pay consumer debt of borrower defaults |
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Balloon payment |
Rate goes up |
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Balloon payment |
Rate goes up |
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Collateral |
Something you put up in case you can't pay your debts |
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Chapter 7 bankruptcy |
Straight bankruptcy Falba people with no steady income – eliminates most debts but requires immediate liquidation |
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Chapter 7 bankruptcy |
Straight bankruptcy Falba people with no steady income – eliminates most debts but requires immediate liquidation |
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Chapter 13 bankruptcy |
Wage earner plan used by people with regular income in less than $250,000 unsecured debt and seven or $50,000 in secured debt - repayment plan is set up with your payments in 3 to 5 years |
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Advantages and disadvantages of filing for bankruptcy |
Somewhat debt-free but remains on credit report for 10 years |
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Three credit reporting agencies in America |
Equifax, Experian, Trans Union |
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Monthly payment - math |
Total debt (non-monthly payments) x .04 |
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Monthly payment - math |
Total debt (non-monthly payments) x .04 |
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Safe debt load |
20–25% of monthly income |
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Safe debt load equation |
Debt over income equals percentage |
