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30 Cards in this Set
- Front
- Back
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why credit?
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avoid paying cash for large outlays
meet a financial emergency convience investment |
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credit danger signs
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regularly use credit cards for impulse buys
postdate checks to keep from bouncing no savings |
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establishing credit
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open checking/savings account
open a credit card account obtain a small loan |
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5 c's of credit
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character - willingness to live up to terms of loan
capacity - ability to service loan collateral - something of value creditor can take incase of default capital - amount of unencumbered assets owned by the borrower condition - the extent to which prevailing economic conditions could affect the borrowers ability to pay |
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open account credit
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a form of credit extende to a consumer in advance of any transaction
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credit limit
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a specified amount beyond which a customoer may not borrow or purchase on credit
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line of credit
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the maximum amount of credit a customer is allowed to have outstanding at any point in time
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cash advance
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a loan that can be obtained by a bank credit cardholder at any participating bank or financial institution
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grace period
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a short period of time, usually 20 to 30 days, during which you can pay your credit card bill in full and not incur any interest charges
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balance transfer
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a program that enables cardholders to readily transfer credit balances from one card to another
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reward credit card
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a bank credit card that combines features of a traditional bank credit card with an additional incentive, such as rebates and airline mileage
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credit card change list
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what is interest rate? fixed or variable?
grace period? annual fee? |
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revolving line of credit
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a type of open account credit offered by banks and other financial institutions that can be accessed by writing checks against demand deposit or specially designated credit line accounts
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unsecured personal credit line
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a line of credit made available to an indvidual on an as needed basis
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home equity credit line
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a line of credit issued against the existing equity in a home
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what goes in FICO
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payment history (35 percent), amounts owed (30 percent), length of credit history (15 %), new credit (10%) and types of credit used (10 %)
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minimum monthly payment
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in open account credit, a minimum specified percentage of the new account balance that must be paid in order to remain current
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shop around for the best deal for a credit card
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annual fees, rate of interest charged on account balance, length of the grace period, method of calculating balances
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Wager earner plan (chapter 13)
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an arrangement for scheduled debt repayment over future years that is an alternative to straight bankruptcyl used when a person has a steady source of income and there is a reasonable chance of repayment within 3 to 5 years.
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straight bankruptcy (chapter 7)
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a legal proceeding that results in "wiping the slate clean and starting anew"; most of a debtor's financial affairs in order
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consumer loans
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loans made for specific purposes using formally negotiated contracts that specify the borrowing terms and repayment
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collateral
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an item of value used to secure the principal portion of a loan
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different types of loans
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auto, durable goods, education, personal, consolidation
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single payment loans
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a loan made for a specified period, at the end of which payment is due in full
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installment loan
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a loan that is repaid in a series of fixed, scheduled payments rather than a lump sum
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looking at loans
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finance charges, loan maturity, total cost of transaction, collateral
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prepayment penatly
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an additional charge you may owe if you decide to pay off your loan prior to maturity
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lien
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a legal claim permitting the lender, in case the borrower defaults, to liquidate the items serving as collateral to satisfy the obligation
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loan rollover
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the process of paying off a loan by taking out another loan
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credit life/disability insurance
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a type of life/disability insurance in which the coverage decreases at the same rate as the loan balance
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