ch 16 - Credit Cards

credit

Purchasing goods or services in exchange for a promise to pay money in the future

interest

This is the charge of borrowing money

lender

The person or organization who has the resources to provide the individual with a loan

borrower

The person or organization that is receiving the money from the lender

close end credit

A one time loan is also known as

creditworthiness

Is an individuals ability & willingness to pay the money back

minimum interest charge

These charges typically range from $0.50 to $2 per month

pay off balance each time

To avoid interest on purchases

cash advance

Withdrawing cash from an ATM using a credit card.

balance transfer

The act of transferring debt from one credit card account to another

variable rate

An APR that may change depending on other factors

prime rate

An index that represents the interest rate most banks charge their most credit-worthy customers

introductory rate

APR charged during the credit card's introductory period

delinquent accounts

Negative credit card behaviors

300-850

The range of credit scores

year to date totals

The total amount paid in fees & interest charges for the current year

minimum payment warning

Estimate of how long it can take to pay off a credit card balance if only the minimum paid

late payment warning

States any additional fees & the higher interest rate that may be charged if a payment is late

payment history

Includes the total new balance, the minimum payment amount, and the date payment is due

summary of accounts

This section includes payments, credits, purchases, balance transfers, cash advances, etc

credit use

One thing a FICO Score is made up of

credit score

A number that summarizes an individual's credit record and history

credit report

A record of a consumer's credit history

debit card

A plastic card which looks like a credit card, but connected to bank account

APR

The cost of using credit is expressed as this type of interest rate

credit limit

Is the maximum dollar amount loaned