TOPIC 6 Flashcards
APR
Annual percentage rate – the total cost of borrowing over one year, including the interest charged and any fees.
CCV (Card verification value)
Three numbers on the back of a credit or debit card. This is a security measure designed to prevent fraudulent use of the card by someone other than the cardholder.
Charge card
A credit card that must be repaid in full every month.
Consumer credit
Another term for borrowing money
Credit agreement
The formal agreement between a provider and a borrower setting out the amount borrowed, the interest charged, the
arrangements for repayment and any other terms and conditions.
Credit union
A mutual organisation (that is, owned by its members) that provides a range of financial products to members, e.g savings accounts and personal loans. Members of a credit union must share a common bond, e.g all work for the same employer or all work in the same district.
EAR
The cost of borrowing using an overdraft.
Payday loan
A loan designed to be taken out for only a very short period, which charges a very high APR.
Payment allocation
The order in which a card provider uses money paid into an account to pay off the amount outstanding.
Personal loan
A product that allows someone to borrow a fixed amount over a fixed period at a fixed rate of interest.
Store card
A card issued by a retailer that the holder can use to make purchases within that store or group of stores. As with a credit card, the amount owing is paid off at a later date, either in one payment or in instalments, and interest is charged on the amount owed.
