Chapters 4-6 Flashcards
Annual Percentage Yield (APY)
The percentage rate expressing the total amount of interest that would be received on a $100 deposit based on the annual rate and frequency of compounding for a 365 day period
Asset Management Account
An all in one account that includes savings, checking, borrowing, investing, and other financial services for a single fee
ATM
A computer terminal used to conduct banking transactions
Certificate of Deposit
A savings plan requiring that a certain amount be left on deposit for a stated time period to earn a specified interest rate
Commercial Bank
A financial institution that offers a full range of financial services to individuals, businesses, and government agencies
Compounding
A process that calculates interest based on previously earned interest
Credit Union
A user owned non profit cooperative financial institution that is organized for the benefit of its members
Debit Card
A plastic access card used in computerized bank transactions
Money Market Account
A savings account offered by banks, savings and loan associations, and credit unions that requires a minimum balance and has earnings based on market interest rates
Money Market Fund
A savings investment plan offered by investment companies, with earnings based on investments in various short term financial instruments
Mutual Savings Bank
A financial institution that is owned by depositors and specializes in savings accounts and mortgage loans
Overdraft Protection
An automatic loan made to cover the amount of checks written in excess of the available balance in the checking account
Rate of Return
The percentage of increase in the value of savings as a result of interest earned, also called yield
Savings and Loan Association (S&L)
A financial institution that traditionally specialized in savings accounts and mortgage loans
Trust
A legal agreement that provides for the management and control of assets by one party for the benefit of another
Annual Percentage Rate (APR)
The percentage cost of credit on a yearly basis. The APR yields a true rate of interest for comparisons with other sources of credit
Capacity
The borrowers ability to pay additional debts
Capital
The borrowers assets or net worth
Character
The borrowers attitude toward his or her credit obligations
Closed end credit
One time loan that borrower pays back in a specified period of time and in payments of equal amounts
Collateral
A valuable asset that is pledged to ensure loan payments
Conditions
The general economic conditions that can affect a borrowers ability to repay a loan
Consumer credit
The use of credit for personal needs (except a home mortgage)
Credit
An arrangement to receive cash, goods, or services now and pay for them in the future
Fair Credit Billing Act
Sets procedures for promptly correcting billing mistakes, refusing to make credit card payments on defective goods, and promptly crediting payments
Finance Charge
The total dollar amount paid to use credit
Interest
A periodic charge for the use of credit
Line of Credit
A short term loan that is approved before you actually need the money
Mobile Commerce
The ability to purchase using a mobile device
Open End Credit
A line of credit in which loans are made on a continuous basis and the borrower is billed periodically for at least partial payment
Revolving Check Credit
A prearranged loan from a bank for a specified amount
Simple interest
Interest computed on principal only and without compounding
Arbitration
The settlement of a difference by a third party whose decision is legally binding
Class action suit
A legal action taken by a few individuals on behalf of all the people who have suffered the same alleged injustice
Legal aid society
One of a network of publicly supported community law offices that provide legal assistance to consumers who cannot afford their own attorney
Mediation
The attempt by an impartial third party to resolve a difference between two parties through discussion and negotiation
Service Contract
An agreement between a business and a consumer to cover the repair costs of a product
Small Claims Court
A court that settles legal differences involving amounts below a set limit and employs a process in which the litigants usually do not use a lawyer
Warranty
A written guarantee from the manufacturer or distributor of a product that specified the conditions under which the product can be returned, replaced, or repaired
