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41 Cards in this Set
- Front
- Back
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Credit |
A medium of exchange that allows individuals to buy goods or services now and pay for them later |
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Closed end credit |
A loan for a specific amount that must be repaid with finance charges by specific date |
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Finance charge |
The total amount paid by a borrower to a lender for the use of credit |
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Contract |
A legally binding agreement between the borrower and the creditor |
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Principal |
The amount of money borrowed |
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Open end credit |
An agreement that allows the borrower to use a specific amount of money for an indefinite period of time |
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Line of credit |
A pre-approved amount that an individual can borrow |
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Collateral |
Property that a borrower promises to give up in case of default |
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Secured loan |
A loan that requires collateral |
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Unsecured loan |
A loan made on the strength of a signature alone |
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Cosigner |
A responsible person who signs the loan with the person to whom the loan is granted |
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Creditworthy |
Having the assets, income, and tendency to repay debt |
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Credit report |
A record of a person's credit history and financial history |
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Credit score |
A numerical measure of a loan applicant creditworthiness at a particular point in time |
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Annual percentage rate |
The annual cost of credit a lender charges |
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Credit card |
A plastic card that allows the holder to make credit purchases up to an authorized amount |
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Cash advance |
A loan against the available credit on your account |
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Store credit cards |
Permit you to charge purchases only with the merchant issue in the card |
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Travel and entertainment cards |
Usually require you to pay the entire balance each month. Some allow you to pay over a long period of time for travel and vacation related expenses |
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Regular charge account |
Let's an individual charge goods and services in exchange for a promise to pay in full within 25 days of the billing date |
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Revolving credit account |
A type of credit agreement that offers a choice of paying in full each month or spreading payments over a period of time |
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Acceleration clause |
A statement in a contract that allows the creditor to require full and immediate payment of the entire balance if you miss a payment or fail to abide by the terms of the contract |
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Grace period |
The time between the billing date and the start of interest charges |
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Collection agency |
A business that specializes in debt collection |
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Repossession |
The taking of collateral when borrower fails to repay a loan |
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Foreclosure |
The forced sale of property |
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Lien |
A legal claim on a borrowers property by a creditor who is owed money |
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Garnishment |
A legal procedure requiring a portion of the debtors pay to be set aside by the persons employer to pay creditors |
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Bankruptcy |
A legal state in which the courts excuses a debtor from repaying some or all debt |
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Chapter 7 bankruptcy |
Most common type of bankruptcy filed. A person must pass a means test. If they do, the Court declares the person unable to meet financial obligations |
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Chapter 13 bankruptcy |
Permit debtors with regular incomes to pay all or a portion of their debts under the protection and supervision of the court |
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Credit counseling service |
An organization that provides debt and financial management advice and services to people with debt problems at little or no cost |
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Loan shark |
Someone who lends money at excessive rate of interest |
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Easy access credit |
The short term loan at a high interest rate that is granted regardless of the borrower's credit history |
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Payday loan |
Short term, high interest loan that usually must be repaid on the borrower's next payday |
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Pawn shop |
A business that gives customers high interest loans with personal property, such as jewelry, held as collateral |
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Rent to own |
An arrangement in which a consumer pays rent for the use of a product and eventually owns it |
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Title loan |
A short term loan made using a borrower's car as collateral |
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Credit fraud |
The fraudulent use of someone else's credit information |
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identity theft |
A form of credit fraud that involves stealing someone's personal information and using the information to commit theft or fraud |
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Phishing |
A crime committed online with emails that seek your personal information |
