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College Success Seminar > Credit > Flashcards

Credit Flashcards

1
Q

An example of open-end credit is

A

Credit card or home equity loan

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2
Q

An entity such as a bank, finance company, credit union, business, or individual to which money is owed

A

Creditor

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3
Q

The total dollar amount you pay to use credit

A

Finance Charge

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4
Q

A time period during which no finance charges are added to a credit card account.

A

Grace Period

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5
Q

Businesses that collect debt for creditors

A

Debt Collector

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6
Q

The amount of money that a person borrows is called

A

Principal

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7
Q

An asset used as a form of security to help guarantee that a creditor will be repaid. It can be taken in case a debt is not paid

A

Collateral

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8
Q

The smallest amount you can pay and remain a borrower in good standing

A

Minimum Monthly Payment

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9
Q

The type of credit where you receive a one time loan that you will pay back over a specified period of time and in payments of equal amounts

A

Close End Credit

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10
Q

A measure of a person’s ability and willingness to make credit payments on time

A

Credit Rating

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11
Q

The best annual fee for a credit card would be

A

No Annual Fee

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12
Q

When a person agrees to be responsible for loan payments if the other party fails to make them

A

Co-Signer

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13
Q

If you report a credit card lost or stolen and there are fraudulent charges on the account, you would typically be responsible for what amount of money

A

There’s no legal limit, the card company chooses how much but must state it in writing.

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14
Q

A legal process in which some or all of the assets of a debtor are distributed among the creditors because the debtor is unable to pay his or her debts.

A

Bankruptcy

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15
Q

The maximum amount of money a creditor has made available to a person

A

Credit Limit

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16
Q

How should a consumer begin to correct a mistake on a credit card bill?

A

Call and also notify the creditor in writing

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17
Q

Requires consumers under the age of 21 to prove that they have an independent income or get a co-signer before applying for a credit card.

A

CARD Act

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18
Q

A typical credit bureau file consists of the following

A

Your social security number, your employer, position, and income

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19
Q

If you default on a loan, it will stay on your credit report for

A

7 years

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20
Q

The finance charge on a credit card is calculated using the

A

Annual Percentage Rate

21
Q

Prohibits credit discrimination on the basis of sex, race, martial status, religion, national origin, age, or receipt of public assistance.

A

Equal Credit Opportunity Act

22
Q

Requires creditors to disclose in writing certain cost information, such as the annual percentage rate (APR), before consumers enter into credit transactions

A

The Truth in Lending Act

23
Q

Insures the accuracy and privacy of information, kept by credit bureaus and consumer reporting agencies. It gives consumers the right to know what information credit bureau’s and consumer reporting agencies are distributing about them to creditors, insurance companies, and employers

A

Fair Credit Reporting Act

24
Q

The income you receive after taxes are taken out

A

Net Income

25
Q

It would be in your best interest to have what type of APR

A

Low

26
Q
  1. A number, roughly between 350 and 850, that reflects the credit history detailed by a person’s credit report.
A

Credit Score

27
Q

Fee charged for using the credit card even when you pay off the balance in full every month.

A

Minimum Finance Charge

28
Q

A loan that is paid in equal monthly installments with a fixed interest rate.

A

Installment Credit Loan

29
Q

Charge imposed for not paying on time.

A

Late Payment Fee

30
Q

A failure to meet a financial obligation

A

Default

31
Q

The process of moving an unpaid credit card debt from one issuer to another credit card.

A

Balance Transfer

32
Q

A document containing financial information about a person, focusing on his or her history of paying obligations, such as a mortgage, car payment, utilities, and credit cards.

A

Credit Report

33
Q

What are the three credit bureaus?

A

Experian, Equifax, TransUnion

34
Q

A short-term, high-interest cash loan usually secured by your next paycheck

A

Payday Loan

35
Q

The low rate charged by a lender for an initial period to entice customers to sign up or switch credit cards.

A

Introductory Rate

36
Q

If you declare bankruptcy, how long will it be listed on your credit report

A

10 years

37
Q

A business that collects and sells information about consumer debt and their repayment of debt.

A

Credit Bureau

38
Q

The written statement that gives the terms and conditions of a credit card account.

A

Card Holder Agreement

39
Q

When a person is granted Chapter 7 bankruptcy, what does NOT have to be repaid

A
  • Alimony and child support
  • Drunk driving judgments and criminal fines
  • Student loans
40
Q

What are the five C’s that help decide your ability to repay credit?

A

Character, Collateral, Capital, Capacity, Conditions

41
Q

A credit card company can change the terms of your agreement…

A

Anytime after giving you 45-days notice

42
Q

When considering a credit card’s APR, it would be best to:

A

Choose a low APR

43
Q

Fraudulent, unethical, discriminatory, or abusive lending practices to exploit vulnerable borrowers is

A

Bait and switch

44
Q

What are things that are wise to use credit (not just credit cards) to buy?

A

Education, Car, Home

45
Q

What are disadvantage of using a credit card?

A

Extension of income, High Interest Rates, Potential for Increased Debt, Credit Card Fraud, Easier than applying for loans

46
Q

The percentage of debt you have in relation to your net income

A

Debt to Income Ratio

47
Q

What has the most impact on your credit score?

A

Payment History

48
Q

What happens when you only pay the minimum payment on your credit card bill?

A

Takes very long to pay off and pay a lot in interest

College Success Seminar (11 decks)

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