Credit Cards Flashcards
Credit
The ability to obtain goods or services before payment
Creditor
Person or company money is owed
Principal
First in order of importance
Secured credit
Credit card that’s backed by a savings account
Collateral
Pledged as security for repayment of a loan
Closed-end credit
Credit that should be repaid in full amount by the end of the term
Open-end credit
Loan between a financial institution and borrower
Installment
Sum of money due as one of several equal payments
Finance charge
A fee representing the cost of credit
Credit history
Record of a borrowers repayment of debts
Credit bureau
Company that collects information relating to the credit ratings
Credit report
Report of an individuals credit history
Credit rating
Estimate of the ability of a person of organization
Credit score
Number assigned to a person that indicates to lenders their capacity to repay a loan
Cosigner
Signing another persons debt
APR(annual percentage rate)
Rate charged for borrowing or earned through an investment
Grace period
Allows payment to be received for a certain period of time after the due date
Credit limit
Maximum amount of credit a financial institution extends to a client
Consumer finance companies
High risk loans because the people have less than perfect credit
Loan shark
Moneylender who charges extremely high rates of interest
Down payment
Initial payment made when something is bought on credit
Balloon payment
Repayment of the outstanding principal sum
Acceleration clause
Allows a lender to repay all or part of an outstanding loan
Add-on clause
Purchase of additional goods before payment is made
