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20 Cards in this Set
- Front
- Back
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annual fee |
a yearly fee that’s charged by the credit card company for the convenience of the credit card |
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annual percentage rate |
cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan |
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credit card |
type of card issued by a bank that allows users to finance a purchase |
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credit report |
a detailed report of an individual’s credit history |
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credit score |
a measure of an individual’s credit risk; calculated from a credit report using a standardized formula |
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debt snowball |
preferred method of debt repayment; includes a list of all debts organized from smallest to largest balance; minimum payments are made to all debts for the smallest, which is attacked with the largest possible payments |
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depreciation |
a decrease or loss in value |
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introductory rate |
and interest rate charged to a customer during the early stages of loan; the rate often goes up after a specified period of time |
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loan term |
time frame that a loan agreement is in force, and before or at the end of which the loan should either be repaid or renegotiated for another term |
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tax deduction |
an expense, such as a charitable contribution, that can be deducted from one’s taxable income |
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3 main credit bureaus |
Experian, TransUnion, Equifax |
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ways to protect yourself from identity theft |
-use a paper shredder & destroy credit cards -check your credit report annually -never print your social security number or driver’s license number on your checks |
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true or false: you must establish credit in order to buy a house |
false |
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true or false: if you are a victim of identity theft, you are only responsible for paying back half of the debt |
false |
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which of the following is not a factor in determining a FICO score? |
-paying cash for all purchases -getting a personal loan from a bank -using credit cards -taking out a mortgage on a house |
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which of the following is not a good idea for getting out of debt? |
-quit borrowing money -get a part time job or work over time -borrow money from your parents to pay off debt -sell something |
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which or the following things cannot be done with a debi card but can be done with a credit card? |
-rent a car -purchase something online -go into debt -purchase an airline ticket |
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why is an adjustable rate mortgage a bad idea? |
it has an interest rate that changes based on market conditions |
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explain why financing a car is a bad idea. |
it hinders your ability to pay off debt or save money during that time & you will be paying interest |
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describe the negative consequences of taking on debt. what effect can debt have on your future? |
it prevents you from paying yourself through saving & investing making it difficult to build wealth over time |
