Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
63 Cards in this Set
- Front
- Back
|
the free period that allows you to avoid a finance charge if you pay in full before the due date
|
grace period
|
|
|
one who lends money or the use of goods and services for payment at a later date
|
creditor
|
|
|
paying at a future date for the present use of goods and services or money
|
credit
|
|
|
a pre established amount that can be borrowed on demand
|
line of credit
|
|
|
a loan on which the goods purchased with the loan serve as a type of secured loan
|
collateral
|
|
|
credit whereby you can add purchases up to a set credit limit
|
open end credit
|
|
|
a loan for a specific amount that must be repaid in full, including finance charges, by a stated due date
|
closed end credit
|
|
|
money borrowed against the credit card limit
|
cash advance
|
|
|
a manufactured related company that makes loans through authorized representatives
|
sales finance company
|
|
|
unlicensed lenders who charge illegal interest rates
|
loan sharks
|
|
|
a service to customers that allows you to charge now and not be billed for several months
|
deferred billing
|
|
|
the interest you pay for the use of credit
|
finance charge
|
|
|
almost everyone uses this type of credit that involves having work performed and paying for it later
|
service
|
|
|
businesses that stores offer goods and services directly to customers and include department stores, drugstores, and clothing stores
|
retail
|
|
|
small loan companies that charge higher interest rates and take more risks
|
finance companies
|
|
|
laws that in some states, maximum interest rates are set by
|
usury
|
|
|
a legal business where loans are made based on the value of merchandise and used as collateral
|
pawnbroker
|
|
|
something of value that can be sold to pay a debt
|
collateral
|
|
|
one of the earliest forms of credit
|
account
|
|
|
your overall ability to handle credit
|
creditworthiness
|
|
|
a responsible attitude towards paying paying bills and meeting obligations on time
|
character
|
|
|
what will answer questions about how you have paid your bills, how many bills you have had and what type, how much total credit you have been given, and how much credit appears to be outstanding now
|
credit history
|
|
|
a statement that the credit bureau issues which itemizes accumulated info about a person through subscribers and public records
|
credit report
|
|
|
a member of the credit bureau that pays fees for the use of the bureau's services in collecting info and issuing reports
|
subscriber
|
|
|
a type of scores that are the credit scores many lenders use to determine credit risk
|
FICO
|
|
|
the ability to repay a loan or make payments on a debt out of current income
|
capacity
|
|
|
existing debts, stability of employment, and personal factors that determine a persons ability to meet financial obligations
|
conditions
|
|
|
a business that accumulates, stores, and distributes credit info to members
|
credit bureau
|
|
|
a type of rating used by credit bureaus in determining a persons general creditworthiness
|
point system
|
|
|
credit rating that is earned when you pay your bills before the due date
|
a rating
|
|
|
credit rating that is earned when you pay your bills on the due date or within a short grace period
|
b rating
|
|
|
credit rating that is likely to result in denial of new credit
|
poor credit rating
|
|
|
credit rating is given to a person who pays during the grace period, but occasionally takes longer
|
fair credit rating
|
|
|
a person hired to collect the balance due
|
debt collector
|
|
|
the total amount that is financed or borrowed, on which interest is computed
|
principal
|
|
|
rate of interest is charged by banks to their best commercial (business) customers
|
prime
|
|
|
the true annual rate of interest being charged
|
annual percentage rate
|
|
|
the proportion of the purchase price refunded
|
rebate
|
|
|
the amount above what you owe, but below your maximum credit limit
|
unused credit
|
|
|
I=PXRXT
|
simple interest
|
|
|
money paid for the use of someone elses money
|
interest
|
|
|
always expressed as a percentage in the simple interest formula
|
rate
|
|
|
what in the simple interest formula is expressed as a fraction of a year
|
time
|
|
|
a deposit that is often made when purchasing a large or expensive item to ensure that you will continue to make payments
|
down payment
|
|
|
a method of computing finance charges first subtracts the monthly payment and then adds the finance charges to get the new balance
|
adjusted balance
|
|
|
a method of computing finance charges first computes the finance charge and adds it to the balance, and then subtracts the payment to get the new balance
|
previous balance
|
|
|
method of computing finance charges is based on the average of credit balances from each day during the billing cycle
|
average daily balance
|
|
|
a method of computing finance charges using the average daily balance for two months
|
two cycle billing
|
|
|
who gives good legal advice if you want to file bankruptcy
|
attorney
|
|
|
following an individual plan for using credit wisely
|
credit management
|
|
|
the formal process of taking over your debt situation for a period of time, after which you will be free of debt
|
debt adjustment
|
|
|
what will help you set up a voluntary credit plan and will give you good advice
|
credit counseling services
|
|
|
if a person agrees to pay back a debt after it has been discharged by bankruptcy
|
reaffirmation
|
|
|
often called the wage earner's plan because creditors get some of their money back and the debtor enters a plan to pay off a portion of the total debt
|
chapter 13 bankruptcy
|
|
|
often called a straight bankruptcy proceeding, and it allows exempted assets that are considered necessary for survival
|
chapter 7 bankruptcy
|
|
|
a value or possession that is something a debtor is allowed to keep after the bankruptcy because it is considered necessary for survival
|
exempted property
|
|
|
the debtor files a petition with the court asking that the debtor be declared bankrupt
|
voluntary bankruptcy
|
|
|
the creditor files a petition with the court asking that the debtor be declared bankrupt
|
involuntary bankruptcy
|
|
|
to be declared legally insolvent or incapable of paying one's bills
|
bankrupt
|
|
|
a rule that suggests that consumers use no more than 20 percent of yearly take home pay or 10 percent of monthly take home pay to pay credit debts
|
20/10
|
|
|
when a debt does not have to be payed
|
dicharged
|
|
|
a debt that is a loan that is not backed by pledged assets
|
unsecuted
|
|
|
what is for businesses and attempts to reorganize the debt structure rather than liquidate the business
|
chapter 11 bankruptcy
|
