Vocabulary Week 8 Flashcards
Annual Percentage Rate (APR)
the amount of interest spread over a year on a given financial plan
Auto Finance Companies
a company that distributes on a loan for the purpose of buying new or used vehicles
Balance Owed
the principal that the consumer is liable to pay to the lender or other financial institutions
Bank
a financial institution that participates in deposits, withdraws and writing mortgages
Bankruptcy
there are two types of bankruptcy: chaper 7 and chapter 13
Chapter 13 Bankruptcy
the wages earners plan; divides the amount owed over 5 years
Chapter 7 Bankruptcy
when all of the financial assets that are owed are tossed out
Cash Advances
the ability to get cash instantly off of a credit card; typically have a higher interest rate and should be used with caution
Charge Cards
a synonym for a debit, credit, or ATM card; these cards provide the ability to make a payment without cash
Collateral
an asset that is used to be able to hold the loan; for instance, the company of which the car loan was received from uses the the car as collateral; synonymous with secure loan
Consolidation Loan
a loan that combines multiple small loans into one big loan
Consumer Credit Counseling Services
counseling services that are offered by banks and other financial institutions to help the consumer cope with their financial situations and make better decisions
Short Term Goal
a finance goal that can be accomplished in a year or less
Income
anything that is produced and adds monetary value to the consumer’s financial situation
Intermediate Goal
a finance goal that is a bit longer than a short term goal but shorter than a long term goal
Longterm Goal
a financial goal that would take over a year to accomplish
Need
something that the consumer buys that is absolutely necessary
Opportunity Cost
when you have to give up something in order to get what you actually want/ need
Pay Yourself First
the idea that a consumer is to invest in their saving first before paying other parties
Personal Income
income that is produced by the consumer for the consumer
Interest
a percentage of money that is added to the original amount of the product/ service
Rate
how fast your interest will grow
Rules of 72
72 divided by the interest rate tells you how long it will take for your investment to double
Checking Account Number
located at the middle bottom of a check and tell you which account the money belongs to
Collateralized Loan
a loan that has an asset attached to it that can be repossessed if the loan is not paid
