Credit Cards (chapter 7) Flashcards
available credit
amount of money that can be used for purchases with the credit card
cash advance
loan against the available credit on a credit card
credit card
plastic card that allows a person to barrow money from the bank or financial institution that issued it
credit card statement
report that shows the purchases made with a credit card, the current balance and the amount of money that is owed by the due date
credit report
summary of all the companies that have extended credit to a person
FICO score
most common credit score, named for the Fair Isaac Corporation, which provides the calculation for the score
finance charge
fee associated with credit
grace period
time during which you can pay off the balance of your card and not incur finance charges
late fee
fee charged if a person fails to make at least a minimum payment before the due date
line of credit
maximum amount of money a person may barrow with a credit card
two advantages of using a credit card to make a payment instead of using cash
1) Can be more convenient and can be used to buy things online
2) many credit cards offer rewards
what are 3 charges you can get from using a credit card and how can you avoid them?
1) finance charges on unpaid balance
2) late fees
3) annual fees just for holding the card
To avoid: find credit card that doesnt have annual fees and pay your bills on time
why is it complicated to calculate the interest charge on a credit card balance?
because a credit card is a revolving line of credit, which means the balance can constantly change.
what are two reasons to check your credit card statement as soon as it comes in the mail?
1) you can spot an error and quickly report them
2) you will be less likely yo miss your payment due date
what is an advantage of taking out a debt consolidation loan
you might pay a lower interest rate on a consolidation loan than on individual loans
