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Ch.6
Credit
| Term | Definition |
|---|---|
| Credit | A medium of exchange that allows individuals to buy goods or services now and pay for them later |
| Closed-end-Credit | A loan for a specific amount that must be repaid with finance charges by a specificied date |
| Finance Charge | The total amount paid by a borrower to a lender for the use of credit |
| Contract | A legally binding agreement between the borrower and the creditor |
| Principal | The amount of money borrowed |
| Open-end-credit | An agreement that allows the borrower to use a specific amount of money for an indefinite period of time |
| Line of credit | A preapproved amount that an individual can borrow |
| Secured Loan | A loan that requires collateral |
| Collateral | A property that a borrower promises to give up in case of default |
| Unsecured Loan | (Signiture Loan) A loan made on the strength of a signiture alone |
| Cosigner | A responsible person who signs the loan with the person to whom the loan is granted |
| Creditworthy | Having the assets, income, and tendency to repay debt |
| Credit Report | A record of a person's credit history and financial behavior |
| Credit Score | A numerical measure of a loan applicant's creditworthiness at a particular point in time |
| Annual Percentage rate (APR) | The annual cost of crdit lender charges -the higher the APR,the more you pay |
| Credit Card | A plastic card that allows the holder to make credit purchases up to an aunthorized amount |
| Cash Advance | A loan against the available credit on your account |
| Store Credit Card | Issued primarily by major department store chains, permit you to charge purchases only with the merchant issuing the card |
| Travel and Entertainment Card | Require you to pay the entire balance each month |
| Regualr Charge Account | Lets an individual charge goods and services in exchange for a promise to pay in full within 25 days of the billing date |
| Revolving Credit Account | A type of crdit agreement that offers a choice of paying in full each month or spreading payments over a period of time |
| Acceleration Clause | A statement in a contract that allows the creditor to require full and immediate payment of the entire balance if you miss a payment or fail to abide by the terms of the contract |
| Grace Period | The time between the billing date and the start of interest charges |
| Collection Agency | A business that specializes in debt collection |
| Repossession | The taking of collateral when a borrower fails to repay a loan |
| Foreclosure | The forced sale of property |
| Lien | A legal claim on a borrower's property by a creditor who is owed money |
| Garnishment | A legal procedure requiring a portion of the debtor's pay to be set aside by the person's employer to pay creditors |
| Bankruptcy | A legal state in which the courts excuse a debtor from repaying some or all debt |
| Chapter 7 bankruptcy | The most common type of bankruptcy file |
| Chapter 13 bankruptcy | Permits debtors with regular incomes to pay all or a portion of their debts under the protection and supervision of the court |
| Credit Counseling service | An organization that provides debt and financial management advice and services to people with debt problems at little or no cost |
| Loan Shark | Someone who lends money at excessive rates of interest - Usually use predatory lending tactics and offer easy-access credit |
| Easy-access Credit | A short-term loan ata high interest rate that is granted regardless of the borrower's credit history |
| Payday Loans | A short-term, high-interest loan that usually must be repaid on the borrowers's next payday |
| Pawnshop | A business that gives customers high-interest loans with personal property, such as jewelry, held as collateral |
| Rent-to-own | An arrangement in which a consumer pays rent for the use of a product and eventually owns it |
| Title Loan | A short-term loan made using a borrower's car as collateral |
| Credit Fraud | The fraudulent use of someone else's credit information |
| Identity Theft | A form of credit fraud that involves stealing someone's personal information and using the information to commit theft or fraud |
| Phishing | A crime committed online with e-mails that seek your personal information |
Created by:
Jakea Harris
Popular Economics sets