click below
click below
Normal Size Small Size show me how
credit basics
Term | Definition |
---|---|
Credit | Taking out a loan from the bank that you will pay back later. |
Three credit sources | Private morgage companies, depository institutions, automobile dealership. |
Three benefits to using money saved or invested instead of credit. | No contract, no interest fees, not spending future income. |
recommended amount to barrow | total amount should be less than 20 percent of annual net income, monthly payment should be less than 10 percent of monthly income. |
closed end credit | loan which borrower must repay the amount in a specified number of payments. |
open end credit | Extended line of credit established in advance. |
alternate credit features | higher interest, higher fees. |
payday loan | short term loan provided immediate cash by securing a borrowers written check. |
rent-to-own | borrower leases tangible items with the condition that the item will be owned by the renter if the term of the rent is completed |
title loan | pay the lender back cash and fees/interest within a specified time period |
pawn laon | same as title loan |
refund anticpation loan | lender gives borrower a loan based upon their anticipated tax refund |
credit application | A form requesting info about a credit applicant. |
credit limit | a limit on a credit card that cannot be exceeded. |
minimum payment | 5-3.5% of your bill |
APR | Annual percentage rate. interest rate charged on a credit card. |
debit card | electronically connected to an account, pay immediately |
credit card restrictions | must be 21 unless proof of income or a co-signer. |
late payment fee | not paid on time |
over the limit fee | goes over the limit |
APR penalty | charged on new transaction |