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AR Unit 2
Arkansas Intro to Finance Unit 2
| Question | Answer |
|---|---|
| Annual percentage rate (APR) | the cost of credit expressed as a yearly percentage |
| Bankruptcy | a legal process that relieves debtors of the responsibility of paying their debts or protects them while they try to repay |
| Capacity | the ability to repay a loan with present income |
| Capital | property possessed that is worth more than debts owed |
| Character | a responsible attitude toward living up to agreements |
| Closed-ended credit | a loan for a specific amount that must be repaid in full, including all finance charges, by a stated due date |
| Collateral | property pledged to a creditor to assure repayment of a loan |
| Comparison shopping | a shopping method that enables consumers to determine whether they are getting the best quality for the price |
| Consumer advocate | a person who actively promotes consumer causes |
| Co-signer | a person who promises in writing to repay a promissory note if the maker fails to pay |
| Credit | money borrowed to buy something now with an agreement to pay for it later |
| Credit bureau | a company that gathers, stores, and sells credit information to business subscribers |
| Credit history | the complete record of your borrowing and repayment performance |
| Credit rating | a measure of credit-worthiness based on an analysis of a consumer's financial history |
| Credit report | a written statement of a consumer's credit history issued by a credit bureau to its business subscribers |
| Debtor | a person who owes money to others |
| Discharged debts | debts erased by the court during bankruptcy proceedings |
| Discrimination | treating people differently based on prejudice rather than individual merit |
| Down payment | a part of the purchase price paid in cash up front, reducing the amount of a loan |
| Finance charge | the total dollar amount of all interest and fees you pay for the use of credit |
| Finance companies | small loan companies that usually charge high interest rates |
| Fixed-rate loans | loans for which the interest rate does not change (up or down) over the life of the loan |
| Fraud | the intentional misrepresentation of information with the intent to deceive or mislead |
| Garnishment | a legal process that allows part of your paycheck to be withheld for payment of a debt |
| Interest rate | the percentage charged for the use of money |
| Line of credit | a pre-established amount that can be borrowed on demand with no collateral |
| Needs | ingredients necessary for maintaining physical life |
| Open-ended credit | an agreement to lend the borrower an amount up to a stated limit and to allow borrowing up to that limit again whenever the balance falls below the limit |
| Opportunity cost | the value of your next best alternative whenever you make a choice |
| Prime rate | the interest rate lenders offer to their best business customers |
| Principal | the amount borrowed, or the unpaid portion of the amount borrowed, on which the borrower pays interest |
| Service credit | an agreement to have a service performed now and pay for it later |
| Simple interest | interest computed on the amount borrowed only without compounding |
| Statement | an itemized bill showing charges, credit, and payments posted to your account during the billing period |
| Time | the length of time the borrower will take to repay a loan; expressed as a fraction of a year |
| 20/10 rule | your total borrowing should not exceed 20 percent of your yearly take-home pay, and you should not take on monthly payments that total more than 10 percent of your monthly take-home pay |
| Unsecured debt | a loan that is not backed by pledged assets |
| Unused credit | the remaining credit available to you; calculated as your credit limit minus the amount you have already spent |
| Values | the ideals in life that are important to you and affect your decision making |
Created by:
karenhaley
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