Chapter 4 Vocab

Question 1

The amount in which credit card companies can charge for the use of a credit card

Answer 1

Annual fee

Question 2

The cost of borrowing money on an annual basis

Answer 2

Annual percentage rate

Question 3

An adjustable rate mortgage

Answer 3

ARM

Question 4

A home loan where the sum of the monthly payments is not enough to re-pay the entire loan

Answer 4

Balloon mortgage

Question 5

Money loaned

Answer 5

Credit

Question 6

A tool used to make a purchase

Answer 6

Credit card

Question 7

The maximum amount of credit given to a person

Answer 7

Credit limit

Question 8

A card where the money comes directly out of a checking account

Answer 8

Debit card

Question 9

Combining debt into one payment

Answer 9

Debt consolidation

Question 10

Repayment where one pays off accounts starting with the smallest balances

Answer 10

Debt snowball

Question 11

A decrease in price or value

Answer 11

Depreciation

Question 12

The total dollar amount you pay to use credit

Answer 12

Finance charge

Question 13

Subject to foreclosing procedures

Answer 13

Foreclose

Question 14

Time period where no finance charges will be added to your account

Answer 14

Grace period

Question 15

Loan security by equity value in the borrowers home

Answer 15

Home equity loan

Question 16

A temporary interest-rate to entice consumers to apply for a credit card

Answer 16

Introductory rate

Question 17

A long-term rental agreement

Answer 17

Lease

Question 18

The length of time one has to pay off the loan

Answer 18

Loan term

Question 19

Information that has been passed down but isn’t true

Answer 19

Myth

Question 20

A different way of looking at something

Answer 20

Paradigm

Question 21

An expense that can be subtracted from your adjusted income to get to your taxable income

Answer 21

Tax deduction