EPF Unit 5 Buy Now, Pay Later

A collection of vocabulary flashcards covering terms related to credit scoring, credit card management, financial debt structures, and various forms of identity theft and financial fraud.

credit score

a number assigned to a person that indicates to lenders their capacity to repay a loan.

Credit Utilization

The ratio of your credit card balances to credit limits. This impacts your credit score.

Credit Card

Type of card issued by a bank that allows users to finance a purchase. They must pay back the principal and the interest

cash advance

borrowing cash on your credit card, tends to have high interest rates

APR

Annual percentage rate; the annual rate of interest that is charged for using credit

Debt to Income Ratio (DTI)

The relationship, expressed as a percentage, between a borrower's monthly obligations on long-term debts and his or her gross monthly income.

promotional period (credit card)

Short period of time with a LOW APR or extra rewards.

balance transfer

Paying off one credit card balance by transferring it to another credit card. Usually done to take advantage of lower interest rates

Equity

the amount left over when subtracting liabilities from assests. Ex: You sell your house for $300,000$ and you owe $200,000$ on your mortgage--> your equity is $100,000$

Transparency

the presentation of a company's facts and figures in a way that is clear and apparent to all stakeholders

loan shark

someone who lends money at excessive rates of interest

Balloon Payment

a final loan payment that is much larger than the regular monthly payments

default

failure to pay back a loan

Refinance

To revise a loan agreement to make the terms of payment more suitable to a borrower's present income and ability to repay. Frequently done to mortgages to take advantage of lower interest rates

Assets

any items of value that you own

subprime loans

Loans made to homeowners who do not qualify for standard (prime) home loans. Subprime loans can have high fees, and costly prepayment penalties that "lock in" the borrower to a high interest rate.

Propaganda

information, especially of a biased or misleading nature, used to promote or publicize a particular political cause, point of view or product

mortgage

A loan to purchase a home or other real estate

foreclosure

The seizure of property from borrowers who are unable to repay their loans

delinquent account

One that has not been paid within a certain time frame (usually $90$ days for a credit card)

security deposit

money a renter lets an owner hold in case the rent is not paid or an apartment is damaged

Fair Credit Reporting Act

A federal law that established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant and properly used.

card theft

physically stealing a credit card

account takeover

The thief gains access to a person's existing accounts and then run up huge bills before the person knows there is a problem.

cloned card

thieves use "skimmers" to steal card numbers to use

Card=not-present-theft

fraudulent use of a credit card without physical possession of card. Ususally done through hacking or phishing

protection scams

third party charges an excessively high fee to monitor your credit

phishing

a technique to gain personal information for the purpose of identity theft, usually by means of fraudulent e-mail

fraud alert

electronic warning placed on your accounts to monitor for suspicious financial activity