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39 Cards in this Set
- Front
- Back
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Annual Fee |
A flat, yearly charge for owning a credit card |
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Annual Percentage Rate |
A measure of the cost of credit on a yearly basis; expressed in a percentage |
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Average Daily Balance |
The most common method of calculating interest. The lender adds up the amount owed for each day of the billing cycle and divides that number by the number of days in the billing cycle |
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balance |
The amount owed to the lender, including purchase fees, interest, and transaction charges |
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bankruptcy |
A legal process in which some or all of the assesses of the debtor are distributed among the creditors. |
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capacity |
Your ability to pay your debts |
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capital |
Financial resources you have that support you commitment to pay |
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Cash advance |
The use of a credit card at a bank or automatic teller machine to get a loan. |
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character |
Your willingness to repay your debt |
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collateral |
Property or other assets that a borrower offers a lender to secure a loan. (house, car, motorcycle) |
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cosigner |
A person who agrees to pay a loan if the borrower fails to do so |
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credit |
A contractual agreement in which a borrower receives something of value now and agrees to pay the lender at some later date. |
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Credit card |
Typically plastic card issued by a bank or other financial company for the purpose of purchasing goods and services using credit. <<buy now--pay later>> |
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Credit history |
Includes information about whether you pay your bills on time and how much you owe your creditors. |
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Credit limit |
The max. Amount you may charge on a credit card. |
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Credit rating |
A measure of a person's ability and willingness to pay. |
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Credit report |
A complete record of a consumer's credit history |
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Credit score |
A number that reflects the information in your credit report. |
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creditor |
One who lends money |
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debtor |
One who borrows money |
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Durable goods |
A good that does not quickly wear out or is used up |
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Finance charge |
The dollar amount paid to use credit |
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garnishment |
Allows creditor to take part of youth wages if you miss a payment |
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Grace period |
The time, usually about 25 days, in which you can pay your credit card bill without paying finance charge. |
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Installment |
Regular monthly payments in specific amounts |
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interest |
Amount you pay to use someone else's money |
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Minimum payment |
The smallest amount you are required to pay the lender each month |
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mortgage |
Debt that a borrower is obliged to pay back with a predetermined set of payments on large real estate purchases |
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Principle |
Amount of money borrowed |
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repossession |
Legal rights for the creditor to take back the collateral |
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Secured loan |
Need collateral to back up this type of loan |
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Unsecured loan |
Signature or character loan; no collateral is needed to back up this kind of loan |
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Federal Perkins Loan |
School-based, low-interest education loans available for U.S. Citizen. (awarded based on exceptional financial needs) {first come first serve basis} |
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Stafford Loan |
Available to all U.S. Citizen |
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Credit wortiness |
Means to have an established credit record that shows you are a good risk. |
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List Advantages of Credit |
Financial need improve general level of well being Buy large/expensive items Beat inflation keep savings intact Make purchases more convenient |
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List Disadvantages of Credit |
debt Finance charges Poor credit rating Possibility to be stolen Temptation to overspend infaltion |
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Three Types of Credit cards |
Bank Charge Cards Travel & Entertainment Cards Retail Cards |
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Three Types of Charge Accounts |
Open charge-expects payment in full at end of specific period (tab) Budget charge -payments of fixed amount over several months(installments) Revolving charge-charged at any time, but at least part of debt must be paid (credit card) |
