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26 Cards in this Set
- Front
- Back
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Credit |
When goods services or money is received in exchange for a promise to pay a definitely sum of money at a future date. |
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Lender |
The person or organization who has the resources to provide the individual with a loan |
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Borrower |
the person or organization |
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Closed-end credit |
one time loan specified in application |
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Ex of Closed-end credit |
school, car |
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Open-end credit |
Credit extended in advance |
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Ex of Open-end credit |
Credit cards |
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Credit card |
Pre-approved credit for goods and services |
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Credit limit |
Varies based upon an individuals perceived creditworthiness (max amt. loaned) |
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Creditworthiness |
Ability and willingness to pay money back |
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Annual Percentage Rate (APR) |
The cost of credit expressed as a yearly interest rate |
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Advantage |
Convenient payment tool Useful for emergencies Required to rent a car Able to purchase big ticket items and spread out payments Protection against fraud Establish positive credit history Online shopping Bonuses/ Rewards |
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Disadvantages |
Interest can be costly Additional penalty fees Tempting to overspend Risk of identity theft Responsible for lost stolen cards Applying for multiple accounts can lower credit score |
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Debit Card |
Looks like a credit card but is hooked to the cardholders back account, immediately withdrawn |
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Credit Report |
A record of a consumer's credit history that includes info about credit cards use as well as the use of other types of credit |
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Credit score |
A number that summarizes an individuals credit card and history it is a numeric grade of a consumers financial reliability. |
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Positive Credit card use |
Paying in full every month Develop positive credit history High credit score pay bills on time pay balances every month check statements |
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Negative Credit card use |
Take payments Paying only minimum Exceeding card limit Charging items that can't be payed immediately Owning too many cards |
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APR for Purchases |
Introductory rate may change $ |
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APR for Balance Transfers |
Transferring debt from one card to another |
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APR for Cash Advances |
Withdawing casy from an ATM using credit card |
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Penalty APR |
The interest rate charged on new transactions if the penalty terms in the transactions if the penalty terms in the credit card contract are triggered. |
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Truth in Lending Act |
Limits liability for unauthorized credit card charges to $50 per card Must contact within 60 days of the first bill containing the error |
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2009 Card Act |
must be 21 or have a cosigner need sufficient income |
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Safety Tips |
Sign card with signature and "please see ID" Report lost cards Close unwanted accounts Do not give out account numbers unless making a purchase Keep a list of all cards Shred all pre approved credit card offers, applications, or solicitations |
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Fair Credit Billing Act |
Helps to protect consumers while using a credit card to make purchases |
