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26 Cards in this Set
- Front
- Back
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Average American carries this amount of credit cards...
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7.5
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Average American is in this amount of debt...
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$8,000
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Average interest rate of any one credit card is...
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14.7%
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Immediate use of goods and services with promise to pay later
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Credit
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A promise to pay; legal obligation
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Credit Contract
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What are the main uses of credit?
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Major purchases
Renting a car Reserving a hotel room Travel arrangements Emergencies |
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What are the four functions of credit?
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1. Stabalize the economy
2. Promote business growth 3. Expand production 4. Raise the standard of living |
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Does credit increase or decrease the GDP?
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increase
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Credit has the potential to do what to prices if supply doesn't keep up with demand?
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increase
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What are traits of Non-Installment credit?
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pay-in-full, money limits
ex. department stores, gas stations, Diner's Club |
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What are traits of Installment credit?
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largest investment, loans from financial institutions
- fixed amount of money, fixed length of time, fixed cost ex. loan mortgage, personal loans, student loans, home equity loans |
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What are traits of Revolving credit?
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variable amount of money up to a maximum, variable length of time, cost varies and can compount when you pay interest on an outstanding balance
ex. credit card |
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What are the three different types of Credit?
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Non-Installment
Installment Revolving |
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What are the three C's of credit?
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1. character
2. capital 3. capacity |
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What is the 20-10 rule?
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Never borrow more than 20% of your yearly income, and do not exceed more than 10% of monthly net income per monthly payment
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What law says that creditors must procide accurate and complete credit costs and terms?
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Truth in Lending
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This act prohibits discrimination on the basis of age, sex, marital status, reliance on income from pulic assistance, race, religion, or ethnic origin
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Equal Credit Opportunity Act
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Bad credit can remain on your record for how many years?
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7 years
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Bankruptcy can stay on your record for how many years?
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10 years
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What law prevents debt collectors from using abusive language, threats, or false pretenses?
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Fair Debt Collection Practices Act
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This organization protects your right to obtain, use, and maintain credit
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Federal Trade Commission
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A legal proceeding declaring that a consumer is overextended and unable to pay obligations
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Bankruptcy
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What are the traits of Chapter 7 bankruptcy?
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wipes out most debts, assets are liquidated to pay creditors
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What are the traits of Chapter 13 bankruptcy?
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wage-earner bankruptcy, allows people with steady income to pay debts through court-approved plan
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businesses with legitimate need to obtain a credit report
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subscribers
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What are the three credit bureaus?
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Experian
TransUnion Equifax |
