access checks
checks provided by a credit card company that allow you to borrow against your credit card account
balance transfer
moving a balance from one credit card account to another
cancellation fee
a penalty for closing your account prior to a stated period
charge card
form of a credit card where the balance is paid in full each month
collateral
property used as security for a loan
consumer loan
a direct loan of cash made to a consumer at a fixed interest rate for a set period of time
credit
the ability to borrow money and pay it back later
fixed interest rate
interest rate that does not change from month to month
installment credit
credit used to finance a single high priced item through a series of equal payments made over a set period of time
introductory rate
temporary, low-interest rate offered when you open a new account
line of credit
a preapproved loan amount that can be borrowed against
minimum payment
the amount you are required to pay each month on a credit account
over-the-limit fee
a penalty charged for exceeding the approved credit limit
penalty
a fee charged for violating a credit agreement
revolving credit
an account on which the account holder can charge repeatedly up to a maximum limit
service credit
the ability to receive services and pay for them later
spending limit
the maximum amount you are willing to pay for an item
store account
credit account that allows you to charge items or services only at a specific store or merchant
variable interest rate
interest rate that can change at any time without notice
APR (annual percentage rate)
annual rate that is charged for borrowing money
balance
the amount of money owed
cash advance
a service allows cardholders to withdraw cash, either through an ATM or over the counter at a bank or other financial agency
cosigner
act of signing for another person's debt
credit bureau
a company that collects information relating to the credit ratings of individuals and makes it available to credit card companies, financial institutions, etc.
credit card
a card that allows the holder to purchase goods or services on credit.
credit report
a detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness
credit score
a number assigned to a person that indicates to lenders their capacity to repay a loan
creditor
a company or a person of a legal nature that has provided goods, services or a monetary loan to a debtor
debtor
the person or entity who owes money to them
debit card
a card issued by a bank allowing the holder to transfer money electronically to another bank account when making a purchase
FICO (Fair Isaac Corporation)
provide software for calculating a person's credit score
finance charges
any fee representing the cost of credit, or the cost of borrowing
interest
the charge for the privilege of borrowing money, typically expressed as annual percentage rate.
payment history
an indication for lenders and creditors whether an individual is a lending risk due to a history of late or missed payments
principal
the original amount invested
rate
short-term loan that banks give to brokers who in turn lend the money
true
T OR F being financially responsible means you are able to make payments as agreed and honor your financial commitments
false
T OR F financial irresponsibility leads to more fun, less risk, and lack of stress in your life
true
T OR F when defining your spending goal, you should recognize your opportunity cost
false
T OR F the lowest price for a good or service is always the best price
false
T OR F when making a purchase, the return policy is not an important consideration
true
T OR F the person who borrows money or used credit is a debtor
true
T OR F credit cards usually require that you make a minimum monthly payment
false
T OR F VISA and master card are examples of charge cards
true
T OR F loans with collateral gave lower interest rates because of lower risk to the lender
true
T OR F small businesses often rely heavily on their line of credit
true
T OR F with a rewards feature, you can get money back for using your credit card
false
T OR F your FICO score is not important when you are being considered for a new loan or credit card
false
T OR F creditors can never raise the interest rate on a credit card account with a fixed rate
true
T OR F payday loans are a form of easy access credit
a) creditor
a lender is also called a(n)
a) creditor
b) debtor
c) borrower
d) consumer
d) fair isaac and company
which of the following is NOT a major credit bureau?
a) transunion
b) experian
c) equifax
d) fair isaac and company
d) 10 years
information related to a bankruptcy stays in your credit file for how long?
a) 90 days
b) 180 days
c) 3 years
d) 10 years
a) payment history
which carries the most weight when calculating a FICO score?
a) payment history
b) amounts owed
c) length of credit history
d) new credit issue
b) finance charges
interest and fees are also known as
a) debt
b) finance charges
c) variable rates
d) fixed rates