Personal finance chapter 6: credit

1. Credit an arrangement to receive cash, goods, or services now and pay for them in the future
Creditor an entity (a bank, finance company, credit union, business, or individual) to which money is owed
Consumer Credit the use of credit for personal needs
Interest a periodic charge in exchange for the use of credit
Closed End Credit you receive a one time loan that you will pay back over a specified period of time and in payments of equal amounts
Open end credit you borrow money for a variety of goods and services
Line of credit the maximum amount of money the creditor has made available to you
Grace Period a time period during which no finance charges will be added to your account
Finance Charge the total dollar amount you pay to use credit
Net income the income you receive after you pay everything else off (your take home pay, allowance, gifts, interest on bank accounts, and so on)
Annual percentage rate (APR) shows how much credit costs you on a yearly basis, expressed as a percentage
Collateral a form of security to help guarantee that the creditor will be repaid
Simple interest : the interest computed only on the principal
Principal the amount that you borrow
Minimum monthly payment the smallest amount you can pay and remain a borrower in good standing (can cost a lot of money)
Credit rating a measure of a person’s ability and willingness to make credit payments on time
Co-signing means that you agree to be responsible for loan payments if the other party fails to make them.
Debt Collectors businesses that collect debts for creditors.
Indebtedness the condition of being deeply in debt.
Bankruptcy a legal process in which some or all of the assets of a debtor are distributed among the creditors because the debtor is unable to pay his or her debts.
Debtor a person or institution that owes a sum of money
Interest the periodic charge for using credit is…
Being tempted to overspend the greatest disadvantage of using credit cards is…
find the least expensive loan from… family members
paying more in interest the usual trade off of choosing small payments is
capacity which of the give c’s of credit does your income affect?
fair credit billing act which law gives a borrower the right to stop payment?
discriminates against you under the equal credit opportunity act you may sue a creditor if the creditor
bankruptcy the legal process in which some or all of the debtor’s assets are distributed among creditors because the debtor cannot pay his or her debts is called..
chapter 7 bankruptcy relieves an individual from debts arising from… credit card charges

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