Review
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
Help!
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| The two basic forms of credit most commonly used are: | 1. Credit card
2. Installment loan
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| The _____ __________ ____ is the percentage of interest you pay on an annual basis based on how much you have borrowed. | annual percentage rate
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| You must pay at least the _______ _______ each month to avoid late charges and lowering your credit rating. | minimum payment
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| When you _______ on a loan or a credit card, this means you have stopped making payments, usually because you are unable to afford the payments. | default
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| For instance, while most credit cards and debit cards have 16-digit account numbers, ________ _______ only has 15-digit account numbers. | American Express
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| The first ___ ______ show which company has issued the card. | six digits
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| If you have a credit limit of 500 dollars on your card, and you try to charge more than this amount before you have paid your bill, one of the two things will happen. | 1. Either the merchant will be told that the purchase cannot be approved.
2. The credit card company will approve the charge, but will charge you on an "over-the-limit" fee.
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| Three things affect your credit card costs: | 1. Annual fees
2. Finance charges
3. Grade periods
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| If you do not pay your balance in full each month, you are _______ ________ for the amount you did not pay. | charged interest
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| If your payment arrives, even one day after the due date, you will be charged a ____ _______ ___. | late payment fee
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| late payment fee ___ to ___. | 500 to 810
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| This is an overall score assigned to your account by the credit bureaus. The ______ the number is, the ______ your rating is. This means, the ______ your credit rating is, the _____ your interest rate will be. | higher, better, better, lower
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| _____ ____ is the interest rate used by most banks and based on the federal fund rate. | Prime rate
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| The _______ _______ represents how much is still owed on your account from the previous month’s statement. | opening balance
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| Your _______ _______ represents how much is owed on your account after your most recent payments and purchases are taken into account. | closing balance
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| You have up to __ ____ from the date of the transaction to contact the credit card company or lender about the possible error. | 60 days
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| The most you will be liable for is __ _______ of charges someone else makes on your account. | 50 dollars
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| If you are no longer using a credit card, you should cancel it so the credit limit available to you through this particular credit card company does not affect your ______ ______. | credit rating
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| Keep your ___ in a safe place and never write it on your card. | PIN
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| There are three national credit bureaus: | 1. Equifax
2. Experian
3. Transunion
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| Individuals are allowed to get a copy of their own credit report for free ____ a year from each of these national credit bureaus. | once
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| There are two major components which make up your credit history: | 1. Consumer credit information
2. Public records
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| Public records which are kept on your credit history include: | negative information, such as if you filed for bankruptcy, experienced a foreclosure on your home, have had a tax lien placed on your assets by the federal, state or local government, and by court judgments.
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| 24. There are _ main criteria credit bureaus use to determine your credit rating or score. | 5
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| These five criteria are: | 1. Payment history
2. Total amount you owe
3. Length of credit history
4. How much new credit
5. What types of credit
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| ________ _____ are normally used for various types of big ticket purchases individuals routinely make. | Personal loans
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| The difference between a bank or installment loan and a credit card payment: | installment loan is a fixed payment for a specific amount, and you are going to pay it over however many years and the term is also fixed, whether it be two years or five years
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| The _________ is the actual amount of money you borrowed from the lender for your purchase. | principal
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| The ________ ____ can be fixed or it can be adjustable.The interest rate can be fixed or it can be adjustable. | interest rate
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| A _____ ____ means the interest rate set at the time you take out the loan will be the interest rate you pay throughout the entire term of the loan. | fixed rate
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| An __________ ____ may change during the term of the loan. | adjustable rate
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| The ____ is the length of time the loan is set up for you to pay it back. | term
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| When you put up collateral for a loan, it is said to be a ______ ____. | secure loan
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| __________ is an asset, usually what is being purchased, which the bank owns the rights to until the loan is paid in full. | Collateral
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| An _________ ____ is one where the money is loaned to an individual simply on their reputation, sometimes called a _________ ____ because all the bank has is the individual’s signature on the loan document agreeing to pay back the loan plus interest. | unsecured loan, signature loan
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| With a ____ ___, you get the principle of the loan you borrowed. | lump loan
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| There are three basic fees you may pay when you take out a loan: | 1.application fee
2.credit history fee
3.attorney fee
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| We also look at how much they make relative to how much they are obligated for. That is called a | debt-to-income ratio
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| The term of your loan plays an important role in calculating the _______ ____ of your loan. | overall cost
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Created by:
Mrs. Eaton-Maddox
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