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Consumer Economics > Credit Card Review > Flashcards

Credit Card Review Flashcards

1
Q

Balance transfers

A

Transferring debt from one credit card to another

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2
Q

Over-The-Limit Fee

A

Charged if the account balance goes over the set credit limit

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3
Q

Credit limit

A

The maximum amount of charge allowed to an account

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4
Q

Annual percentage rate (APR)

A

The cost of credit expressed as a yearly interest rate

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5
Q

Introductory rate

A

The interest rate that may be charged right after a credit card account is opened

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6
Q

Variable-Rate APR

A

An interest rate that may change depending on other factors, such as the prime rate

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7
Q

Annual fee

A

A yearly fee that may be charged for having a credit card

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8
Q

Late-Payment Fee

A

Charges when a cardholder dies not make the minimum monthly payment by the due date

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9
Q

Penalty APR

A

When you fail to pay a bill on time, and they increase the APR

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10
Q

Is a 13% or an 18% APR for a credit card better?

A

13%

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11
Q

What are three safety tips when using a credit card?

A

Don’t overspend
Use a protected website
Don’t let people see you imputing #’s

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12
Q

Advantages to having a credit card

A

Easy money
Convenient
Large purchases can be made
Don’t need to carry large amounts of cash

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13
Q

Disadvantages to having credit cards

A

Debt
Impulse spending
Identity theft

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14
Q

Closed end credit vs Open ended credit

A

Closed: there is a set time the loan exists (examples-car loan, mortgage)
Open: can keep using, don’t have to repay

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15
Q

Debit card vs Credit card

A

Debit-immediate (takes money directly out of account)

Credit-money is owed

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16
Q

What may happen if a cardholder makes a late credit card payment?

A
  • Penalty APR
  • Hurt credit score
  • Late fee
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17
Q

What can happen if you have no credit history?

A

You may be denied credit

18
Q

People under 21 can never receive a credit card

true/false?

A

False

19
Q

The Truth in Lending Act limits an individuals liability for unauthorized (blank)

A

Limits unauthorized credit charges in case a credit card is lost/stolen

20
Q

What are two ways to determine if a website is secure when purchasing items online?

A

https at the begging of URL

Lock icon on the browser

21
Q

Credit

A

A customers ability to obtain goods or services before payment based on trust

22
Q

What are the three C’s of Credit

A

Character
Capital
Capacity

23
Q

Character

A

Lenders checks to see if you’re a responsible person

24
Q

Capital

A

Lender makes sure you have assets they can take if credit debt can’t be payed

25
Q

Capacity

A

The individuals ability to pay them back

26
Q

What’s the Truth-In-Lending act?

A

A law made to promote the informed use of consumer credit by disclosures about its terms and costs

27
Q

Line of credit

A

Amount of credit extended to a borrower

28
Q

Which loans are down payments required?

A

Auto and Mortgage

29
Q

Installment credit

A

A type of credit that has a fixed # of payments

30
Q

Revolving credit

A

Credit that is automatically renewed as debts are payed off

31
Q

Credit score

A

given to a person that indicates to lenders their capacity to pay a loan

32
Q

Credit rating

A

Estimate of how well a person will pay a loan based on past dealings

33
Q

What are advantages to having a good interest rate?

A
  • more likely to get a loan
  • better (lower) interest rate
  • have credit cards with lower interest rate (more benefits)
34
Q

What are the thee major credit reporting agencies?

A

Equifax
Experian
TransUnion, LLC

35
Q

Consigner

A

An individual with good credit who signs a loan with an applicant. They have to pay it if the signer can’t

36
Q

Bankruptcy

A

The legal process of relieving someone of their outstanding debt
(will hurt credit score for 7-10 years)

37
Q

Collateral

A

Something that can be pledged as security for a loan in the even that the loan in not repaid
(car payment for a car loan)

38
Q

Credit limit specifies what?

A

The maximum amount charged to a credit card

39
Q

General purpose credit cards

A

Visa
MasterCard
Discover

40
Q

Fair Credit Reporting Act

A

Promotes fairness, accuracy, and privacy of a consumer

41
Q

Interest

A

The charge for borrowing money

Consumer Economics (7 decks)

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