credit

credit

the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.

credit card

card issued by a bank or company that allows a person to purchase goods and services on credit.

credit limit

maximum amount of credit (money) that allows a person to spend or use on a credit card. Each person's credit limit is different. The more responsible you are in paying back your debt, the higher your credit limit will increase.

interest

the charge for the ability to borrow money. It is money owed in addition to the original money you borrow.

revolving (credit card)

there is a limit you spend. that limit can change depending on what you spend, and what you pay back.

installment (loan)

you borrow a lump sum of money. every month, you make a payment until the loan is paid off.

fixed

stays the same over time

credit history

a profile or report of a person's debt and repayment habits

cardholder agreement

a document that describes the rules that apply to the use of a credit card

balance

money that you owe on a credit card

APR

"annual percentage rate"; the cost of credit or how much you pay to get a loan, on a yearly basis.

afford

to be able to pay

annual fee

An amount that credit card companies can charge for the use of a credit card.

variable

changes over time

default

failure to pay back a loan

credit rating

a person's reputation for paying bills on time; assigned a score (number, 300-850)

annual

yearly

debt

Money owed

benefit

to gain or receive good results from something

consequence

the result of an action

secured card

Often used as a first credit card or a way to re-establish credit. Instead of borrowing from a company, you deposit your money in a special savings account

unsecured card

A credit card that is not secured by collateral. Unsecured cards are the majority of cards issued. They don't have deposits. They have lower interest rates and better rewards.

debit card

A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder

overdue

unpaid when due; delayed beyond an appointed time

Minimum Payment

The smallest required payment that a credit card holder can pay on a monthly bill and still remain in good standing with the lender.

transaction

A business deal or action; exchange of money, goods, or services

bankruptcy

A condition under which a person or corporation is declared unable to pay debts

fixed rate

an interest rate that does not change over time.

grace period

A time period (often 25 days) during which no finance charges will be added to your account

income

money received, especially on a regular basis, for work or through investments.

secured card

can qualify with a credit score of 580 or lower;

you deposit an amount (security deposit) and you get that as a balance.

unsecured cards

need a credit score of 670 or greater;

ongoing line of credit with no need of a deposit

many more perks and rewards