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79 Cards in this Set

  • Front
  • Back
Act limiting liability if credit card is lost or stolen
Consumer Protection Act
Allows the purchase of goods and services when cost is too great for current resources
Credit Card
3 Kinds of goods and services for which credit should not be used
Daily expenses, nondurable, short lived
3 things lender considers concerning creditworthiness
present earnings, net worth, credit history
Maximum percentage (excluding mortgage) of income to be used in paying off debt
Form of credit issued to consumer in advance of transaction
Open Credit
Account not involving charge card
30 day charge account
3 types of revolving credit
overdraft protection, unsecured personal, and home equity
Act making discrimination in credit illegal
Equal Credit Act
3 parts of Truth in Lending
APR, payment, fees
Gives option to return unsatisfactory goods and services purchased on account
Fair Credit Billing Act
two kinds of bankruptcy
chap 13, chap 7
Cash Advances
Bank (Credit) Cards
two cycle
more interest
highest interest
bank cards
2 most common bank credit fees
annual and transaction
2 most common types of loans
single payment and installment
half of all consumer loans
helps overextended credit
consolidated loan
single payment maturity period
1 year
only tax deductible consumer loan interest
home equity, student
lowest interest rates
commercial banks
unsecured, high risk loans
consumer finance corporations
sales finance company
buys installment contracts from businesses and sells them to purchasers
Captive finance company
3 most important features of a loan contract
collateral, maturity, repayment
chattel mortgage
gives lender title to collateral in case of default
collateral note
agreement allowing lenders to sell collateral in case of default
prepayment clause
obligates borrower to pay interest in case of early repayment
loan rollover
extends maturity on single payment loans
simple method interest
most common, lower APR
discount interest
least common, higher APR
Installment purchase contract components
sales contract, security agreement, note, insurance agreement
credit life insurance
insures lender against death of borrower
acceleration clause
allows lender to demand full payment at any given time, rarely used
rule of 78
determines monthly interest charges
if savings earnings are higher than cost of borrowing
paid up whole life
payments end at predetermined period
continuous premium whole life
payments conitnue til death
life insurance that doesn't contribute to building an estate
life sold in conjunction with installment loans
clause that stipulates how funds are distributed to beneficiary
settlement clause
nonforfeiture clause
provides whole policyholder with some benefits when a policy is terminated before its maturity
advantages to life insurance for savings
safety of principle, competitive return, liquidity, forced savings
life insurance proceeds
not subject to income tax
no risk tolerance or self control
solid but inexpensive
tax shelter, stock market, high risk
flexibility, savings
reasons for rising costs of health care
poor distribution of facilities and services, administrative and technology costs
health care insurance
pays most health care expenses
major medical plans
large deductible
3 clauses of health insurance policies
deductible, co-pay, waiting period
coordination of benefits
no multiple providers
reduces chance of fake illness
health insurance deductibles
pay to keep benefits after losing job
Government financial aid
Social Security, Worker's comp
Medicare part A
basic hospital
Medicare part B
Supplemental medical insurance
Medicare coverage age
Group of doctors in central location
network of physicians and hospitals
Reducing risk through assumption of loss
Co-pay, internal limits, maximum aggregate limits
5 Cs of Credit
1) character
2) collateral
3) capacity
4) capital
5) condition
Benefits of life insurance
financial protection for dependants, protection from creditors, tax benefits, vehicle for savings
needs analysis method
balances obligations and resources
guaranteed purchase option
ability to purchase coverage without further proof of insurability
fee for service
Blue Cross/Blue Shield
prepaid med. expense plan w/ participating hostpitals
Social security, over 65, disabled
unable to pay for insurance
insurance company comes after liable party on behalf of insured
personal property floater (itemization)
covers property not covered by homeowners
#individual passengers/bodily injury per accident/ property damage per accident
long term care, disability
covers loss of income but very expensive
reduces risk and transfers loss