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Credit
Credit Basics and Understanding Credit Cards
| Question | Answer |
|---|---|
| A yearly fee that may be charged for having a credit card. | Annual Fee |
| The cost of credit expressed as a yearly interest rate | Annual Percentage Rate (APR) |
| The act of transferring debt from one credit card account to another | Balance Transfers |
| A plastic card you can use to access a line of credit that has been established in advance | Credit Card |
| The APR charged during the credit card's introductory period after a credit card account is opened. | Introductory Rate |
| Fee charged if the credit card account balance goes over the set credit limit | Over-the-liimit fee |
| The interest rate charged on new transactions if the penalty terms in the credit card contract are triggered | Penalty APR |
| When someone has passed an initial credit history check | Pre-Approved |
| Fee charged if the cardholder makes a payment but does not have enough money in that account to cover the payment | Returned Payment Fee |
| Terms and fees of a credit card in an easy to read box on all credit card applications and solicitations | Schumer Box |
| An APR that may change depending on other factors | Variable-Rate APR |
| Is a 13% or 18% APR for a credit card better? | 13% |
| How can a consumer avoid paying interest on a credit card? | Pay the balance each month |
| The cost of credit | Interest |
| True or False. Credit card applicants will always be accepted for the card they apply for, but they may have to pay a higher interest rate. | False |
| People under the age of 21 can never receive a credit card. | False |
| The smallest amount that can be paid in order to keep the account current | Minimum Payment |
| APR charged for withdrawing cash from an ATM using a credit card | Cash Advances APR |
| Overview of credit card activity | Summary of Account Activity |
| Total amount paid in fees and interest charges for the current year | Year-to-date totals |
| Estimate of how long it can take to pay off balance if only minimum payment is made | Minimum payment warning |
| A source of credit that may combine elements of open and closed-end credit and usually have high interest rates and fees than other forms of credit | Alternative Credit |
| A loan which you must repay in a specified number of equal monthly payment (also known as installment credit) | Closed-end credit |
| A line of credit established in advance, so you do not have to apply for credit each time credit is desired | Open-end credit |
| A loan based on the value of personal property (guitar, wedding ring, etc.) | Pawn Loan |
| A short-term loan that provides immediate cash by securing a borrower's written check or receiving authorization for automatic withdrawal from the borrower's depository institution | Payday loan |
| Short-term cash advance secured by a taxpayer's expected tax refund | Refund anticipation loan |
| Tangible items such as furniture are leased with the condition that the item will be owned by the renter if the term of rent if completed. | Rent-to-own |
| The borrower gives the lender his/her automobile title in exchange for a set amount of cash. The lender holds the title until the loan is repaid. If the loan is not repaid as agreed, the lender keeps title to the item. | Title Loan |
| Typically paid for the convenience of using credit | Interest |
| Annual interest rates for alternative loans can be as high as 300% | True |
| All lenders check a person's credit report and score during the loan approval process. | False |
| The terms of a loan are always consistent for the length of the loan | False |
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100000249909009