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Consumer Credit
Consumer Credit Terms
| Question | Answer |
|---|---|
| Credit | The supplying of money, goods, or services at present in exchange for the promise of future payment. |
| Creditor | The business or organization that extends the credit. |
| Installments | A set portion of the loan amount that the borrower must pay at regularly scheduled intervals. |
| Sales Credit | Buy something now and pay for it later. |
| Closed-End Credit | A one time extension of credit for a specific amount and time period. |
| Collateral | Property that is pledged to guarantee repayment of a loan. |
| Secured Credit | Is backed by a pledge of property. |
| Payment Schedule | Specifies the date on which installment payments are due and the amount of each installment. |
| Open-End Credit | Also called line of credit. Can be used repeatedly. |
| Finance Charge | The total cost of using credit, includes interest and fees |
| Opportunity Costs | The wants and needs that are given up when a purchase is made. |
| Impulse Buying | Purchasing items that were unplanned. |
| Credit History | The pattern of past behavior in regard to repaying debt. |
| Credit Bureaus | A firm that collects information about the credit worthiness of consumers. |
| Credit Report | Information complied by credit bureaus and reporting agencies about a particular consumer’s transactions and payment patterns. |
| Credit Rating | An evaluation of a consumer’s credit history based on the credit report and other information. |
| Credit Score | A numerical rating, based on credit report information that represents a person’s level of credit worthiness. |
| Cosigner | A person with a strong established credit history who signs the credit application and contract along with the borrower. |
| Secured Credit Card | A card that requires a consumer to keep a savings account as security or pay them money in exchange for credit. |
| Private Label Cards | This can only be used at a single retailer. |
| General Purpose Card | This can be used in million of different location across the country or around the world. |
| Annual Fee | A yearly charge for the use of a credit card. |
| Annual Percentage Rate | The annual rate of interest that is charged for using credit. |
| Variable Rate | The APR can go up or down depending on economic factors. |
| Teaser Rate | A low introductory rate that is in effect for only a limited time. |
| Computation Method | How finance charges are computed. |
| Minimum Payment | The least amount allowed to pay on what you owe. |
| Grace Period | A period of time during which the balance may be paid in full to avoid finance charges. |
| Minimum Finance Charge | The least amount charged based on what you owe. |
| Credit Limit | The maximum amount of credit that the creditor will extend to the borrower. |
Created by:
tlahr
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